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Human capital and economic growth: Sweden 1870–2000

Abstract

This paper presents newly constructed series on human capital in Sweden 1870–2000. The estimates are based on enrolment in different forms of education, stretching as far back as 1812, and the size and age distribution of the population within age range 15–65 years. The secular accumulation of human capital has closely matched the long-term trend in aggregate productivity and both grew at a rate of 2.4% annually. Our estimates differ significantly from the data attributed to Sweden in the international short-cut estimates of human capital for the period since 1960. The basic question addressed is about causality: whether human capital causes economic growth or if causality goes in the other direction. We address this problem with modified Granger-causality tests. According to our results, changes in the stock of human capital have in a systematic way preceded changes in aggregate productivity up to the structural crisis in the 1970s. This allows us to conclude that human capital has been a causal factor in Swedish economic growth since the industrialisation. However, after 1975, the growth of human capital has not been able to match the demands of the third industrial revolution.

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Acknowledgments

Financial support from the Swedish Council for Working Life and Social Research (2002–0649) has enabled this research. Thanks also to participants at the 6th Conference of the European Historical Economics Society and the 2nd BETA Workshop in Historical Economics who commented on earlier versions of this paper. Particular thanks to three anonymous referees of this journal who were very helpful. The remaining flaws are ours.

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Correspondence to Jonas Ljungberg.

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The time series of human capital stocks as well as average years of schooling for Sweden, 1870–2000, are available at: http://www.ehl.lu.se/database/LU-MADD/.

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Ljungberg, J., Nilsson, A. Human capital and economic growth: Sweden 1870–2000. Cliometrica 3, 71–95 (2009). https://doi.org/10.1007/s11698-008-0027-7

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Keywords

  • Human capital
  • Education
  • Economic growth
  • Productivity
  • Vocational education

JEL Classification

  • E01
  • I20
  • J24
  • N33
  • N34
  • O40