Good Schools Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture John Parman Good Schools Make Good Neighbors: Introduction Human Capital Spillovers in Early 20th Human Capital and Agriculture Century Agriculture Iowa’s Farms and Schools Data John Parman Results Private Returns Spillovers Spillovers and Social Networks Conclusions February 23, 2010
Good Schools Brief Overview Make Good Neighbors: Human Capital Spillovers in Early Public school expansion in the American Midwest 20th Century Agriculture occurred at a time when human capital was becoming John Parman increasingly important in agriculture. Introduction The public school system in Iowa developed with a Human Capital focus on improving agricultural productivity. and Agriculture Iowa’s Farms and Estimates of the private returns to education for farmers Schools suggest that Iowa achieved this goal; an additional year Data of high school increased a farmer’s earnings by 5%. Results Private Returns Spillovers A farmer’s education also benefited his neighbors; an Spillovers and Social Networks increase in the mean education level of his neighbors by Conclusions one year increased a farmer’s annual earnings by roughly 3%. The size of these spillovers depended on social group membership and a farmer’s own level of education.
Good Schools Outline of Presentation Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture Review of modern evidence of the role of education in John Parman agriculture Introduction Brief history of Iowa agriculture and education Human Capital and Agriculture Construction of a dataset with education and income Iowa’s Farms and for farmers and their adjacent neighbors Schools Data Estimates of the private returns to education in Results agriculture Private Returns Spillovers Estimates of human capital spillovers across farms Spillovers and Social Networks Estimates of human capital spillovers within and across Conclusions social networks Concluding remarks
Good Schools Previous studies of human capital and agriculture Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture John Parman 6 Introduction 5 Human Capital 4 and Agriculture Frequency Iowa’s Farms and 3 Schools 2 Data 1 Results Private Returns 0 Spillovers Spillovers and Social ‐ 3 ‐ 2 ‐ 1 0 1 2 3 4 5 6 Networks Estimated percent increase in output with an additional year of Conclusions schooling
Good Schools Previous studies of human capital and agriculture Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture John Parman The empirical evidence of the returns to education in agriculture is very mixed. Introduction Human Capital In very stable environments, the returns to formal and Agriculture schooling are small. Iowa’s Farms and Schools In these environments, experience appears more Data effective than schooling for improving productivity. Results Private Returns Schooling is more important in dynamic settings: Spillovers Spillovers and Social educated farmers are more likely to seek out Networks Conclusions information, experiment with and adopt new technologies and adapt to changing market conditions.
Good Schools Previous studies of human capital and agriculture Make Good Neighbors: Human Capital Spillovers in Early 20th Century There is a small body of evidence suggesting that Agriculture diffusion of information through social networks is John Parman important: Introduction Bandiera & Rasul (2006): adoption of new crops Human Capital depends on decisions of family and friends and Agriculture Conley & Udrey (2001): farmers learn from Iowa’s Farms and Schools experimentation of members of their social network Data Foster & Rosenzweig (1995): farmers learn how to Results successfully adopt new seed varieties from neighbors’ Private Returns experimentation Spillovers Spillovers and Social Ryan & Gross (1943): hybrid seed corn diffusion in Iowa Networks based largely on neighbors talking to each other Conclusions As with the formal schooling, these social networks will be more important when the agricultural sector is more dynamic.
Good Schools Innovation in Iowa Agriculture Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture Traditional view, Cochrane (1993): mechanization John Parman accounted for nearly all technological advance on Introduction American farms, latter half of the 19th century was not Human Capital and Agriculture a period of innovation Iowa’s Farms and New view, Olmstead & Rhode (1993, 2002, 2008): Schools Data significant portion of growth in labor productivity was Results from biological advances and settlement patterns Private Returns Spillovers Tasks facing the Iowa farmer: constructing proper Spillovers and Social Networks drainage systems, applying advances in soil science, Conclusions introducing new crops, breeding experiments with corn, pest and disease control, etc.
Good Schools A Basic Timeline of Iowa Education Make Good Neighbors: Human Capital Spillovers in Early 20th Century 1858: Iowa Agricultural College founded, center for Agriculture research, educated rural teachers, directly educated John Parman farmers through short courses) Introduction 1862: Morrill Act passed, land grant institutions to Human Capital and Agriculture “promote the liberal and practical education of the Iowa’s Farms and industrial classes” Schools Data 1887: Hatch Act passed, federal land grants for Results agricultural experiment stations Private Returns Spillovers 1888: Iowa’s Agricultural Experiment Station founded Spillovers and Social Networks 1914: Smith-Lever Act passed, established cooperative Conclusions extension services School consolidation and the introduction of high schools is occurring between 1880 and 1910
Good Schools Rural Schools at the Turn of the Century Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture John Parman Introduction Human Capital and Agriculture Iowa’s Farms and Schools Data Results Private Returns Spillovers Spillovers and Social Networks Conclusions
Good Schools Experimental Plots Make Good Neighbors: Human Capital Spillovers in Early 20th Century Excerpt from a 1903 study guide for school garden work: Agriculture John Parman Experimental Work 1. Plant potatoes at different depths, from just Introduction under the surface to four inches. Which method Human Capital and Agriculture gives best results? Iowa’s Farms and 2. Use seed pieces of varying sizes, from those with Schools Data no eye up to the whole potato. Results 3. Any difference in value of cutting from stem to Private Returns Spillovers stem end and bud end? Spillovers and Social Networks 4. Which is better, one large piece or several small Conclusions ones? 5. What is the order of sprouting of the eyes? 6. How [to best] prevent potato scab?
Good Schools Constructing a Dataset of Linked Neighbors Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture John Parman 1915 Iowa state census: income and education Introduction information (unique for pre-1940 period), occupation, Human Capital and Agriculture ancestry, church affiliation, farm value Iowa’s Farms and Plat maps: farm boundaries, ability to measure areas Schools and distances Data Results County superintendents of schools reports: public Private Returns Spillovers school locations, school characteristics Spillovers and Social Networks Basic approach: digitize plat maps and link geographical Conclusions data to census records and school district data
Good Schools 1915 Iowa State Census Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture John Parman Introduction Human Capital and Agriculture Iowa’s Farms and Schools Data Results Private Returns Spillovers Spillovers and Social Networks Conclusions
Good Schools Township Plat Maps Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture John Parman Introduction Human Capital and Agriculture Iowa’s Farms and Schools Data Results Private Returns Spillovers Spillovers and Social Networks Conclusions
Good Schools Township Plat Maps Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture John Parman Introduction Human Capital and Agriculture Iowa’s Farms and Schools Data Results Private Returns Spillovers Spillovers and Social Networks Conclusions
Good Schools Digitizing Plat Maps Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture John Parman Introduction Human Capital and Agriculture Iowa’s Farms and Schools Data Results Private Returns Spillovers Spillovers and Social Networks Conclusions
Good Schools Digitizing Plat Maps Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture John Parman Introduction Human Capital and Agriculture Iowa’s Farms and Schools Data Results Private Returns Spillovers Spillovers and Social Networks Conclusions
Good Schools Digitizing Plat Maps Make Good Neighbors: Human Capital Spillovers in Early 20th Century Agriculture John Parman Introduction Human Capital and Agriculture Iowa’s Farms and Schools Data Results Private Returns Spillovers Spillovers and Social Networks Conclusions
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