Labor Coercion and Human Capital Promoting Institutions: Evidence from Russia

Why are some countries leaders, and others laggards, in the accumulation of human capital? Recent evidence indicates that land inequality and labor-repressive agriculture have been persistent obstacles to the establishment of human capital promoting institutions such as mass elementary education. Landowners who rely on cheap, immobile farm labor have a strong incentive to oppose investment in schooling as a subsidy to footloose agricultural workers. In this paper, I show that such incentives can be dampened by legacies of the preindustrial economy. In Russia until 1861, serfs paid their obligations either as labor services or as quitrents in cash and kind. I exploit spatial variation in pre-emancipation serf obligations to estimate the effect of quitrents on human capital in 1911. Former quitrent areas had higher male and female literacy rates, school enrollments, and per capita public investment in village schools, after controlling for preexisting differences in human capital.

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