Human capital formation during the first Industrial Revolution: Evidence from the use of steam engines

Researchers- Alexandra de Pleijt , Alessandro Nuvolari, Jacob Weisdorf – look at human capital during industrial revolution.

They say it led to deskilling in UK with demand for unskilled falling quite a bit:

Has technical progress historically been skill-saving or skill-demanding? The consensus is that the implementation of new technologies after the 19th century increased the demand for skilled workers. There is less agreement, however, as one moves further back in time (e.g. Katz and Margo 2014). Recent contributions to ‘unified growth theory’ have argued for a positive effect of technical change on human capital formation during the transition to sustained economic growth (Galor 2011). This has recently received empirical support from a study of 19th century France (Frank and Galor 2017). But the conventional wisdom, based on evidence from 19th century US and industrialising England, is that technological change was predominantly ‘de-skilling’ as the factory system began to replace the artisanal workshop (Goldin and Katz 1998). Combined with a long list of chronicles about machine-breaking riots, triggered by workers’ fears that the new factories would render their skills redundant, the English case, at least prima facie, seems to provide support for the hypothesis that the shift from workshop to factory production reduced the demand for skilled workers. But the effect of technical change on human capital formation during the first Industrial Revolution has not been tested formally.

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Our empirical analysis shows that more steam engines per person was associated with lower shares of unskilled workers (Figure 2). If a county with no steam technology had increased its number of engines per person to the level of Yorkshire West Riding, an important early industrial centre with one engine per 2,500 persons, then it would have led to a 13 percentage point decline in the share of unskilled workers. We also establish that more engines per person was positively connected with higher shares of highly-skilled mechanical workers, such as engineers, wrights, and machine makers, representing the ‘density in the upper tail of professional knowledge’ (Meisenzahl van Mokyr 2012). Our analyses show, however, that the use of steam technology was either negatively associated with, or had no significant effect on, primary education, captured by the primary schools per person, school-enrolment rates, and literacy rates.