Engineering Growth: Innovative Capacity and Development in the Americas

81 Pages Posted: 15 Mar 2017

See all articles by William F. Maloney

William F. Maloney

World Bank - Poverty and Economic Management Unit; IZA Institute of Labor Economics; World Bank - Development Research Group (DECRG)

Felipe Valencia Caicedo

Vancouver School of Economics

Date Written: February 20, 2017

Abstract

This paper offers the first systematic historical evidence on the role of a central actor in modern growth theory - the engineer. It collects cross-country and state level data on the labor share of engineers for the Americas, and county level data on engineering and patenting for the US during the Second Industrial Revolution. These are robustly correlated with income today after controlling for literacy, other types of higher order human capital (e.g. lawyers, physicians), demand side factors, and after instrumenting engineering using the Land Grant Colleges program. A one standard deviation increase in engineers in 1880 accounts for a 16% increase in US county income today, and patenting capacity contributes another 10%. We further show engineering density supported technological adoption and structural transformation across intermediate time periods. Our estimates help explain why countries with similar levels of income in 1900, but tenfold differences in engineers diverged in their growth trajectories over the next century. The results are supported by historical case studies from the US and Latin America.

Keywords: innovative capacity, human capital, engineers, technology diffusion, patents, growth, structural transformation, development, history

JEL Classification: O110, O300, N100, I230

Suggested Citation

Maloney, William F. and Valencia Caicedo, Felipe, Engineering Growth: Innovative Capacity and Development in the Americas (February 20, 2017). CESifo Working Paper Series No. 6339. Available at SSRN: https://ssrn.com/abstract=2932756

William F. Maloney (Contact Author)

World Bank - Poverty and Economic Management Unit ( email )

1818 H Street NW
Washington, DC 20433
United States
202-473-6340 (Phone)
202-522-0054 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
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Washington, DC 20433
United States

Felipe Valencia Caicedo

Vancouver School of Economics ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada

HOME PAGE: http://https://economics.ubc.ca/faculty-and-staff/felipe-valencia-caicedo/

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