[PPT] - Tertiary Education and Prosperity in Developing Countries: Catholic PowerPoint Presentation

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Castello, Chaudhary and Mukhopadhyay

Tertiary Education and Prosperity in Developing Countries: Catholic Missions to Luminosity in India

Amparo Castelló-Climent (University of Valencia) Latika Chaudhary (Naval Postgraduate School) Abhiroop Mukhopadhyay (Indian Statistical Institute)

Human Capital

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Castello, Chaudhary and Mukhopadhyay

The macro literature has tried to identify the

fundamental determinants of development

Institutions (AJR 2001, Acemoglu et al. 2002, 2014),

Geography (Sachs 2003), Trade (Frankel and Romer 1999), Human Capital (Lucas 1998)

Evidence linking human capital to income is weak at

the macro-level

These macro findings are at odds with a large literature in

labor economics on the returns to education

10 to 15% for each additional year of schooling

Motivation

Human Capital 1

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Castello, Chaudhary and Mukhopadhyay

Motivation

Human Capital 2

The literature on the macro effect of human capital

n growth using average years of schooling is not

conclusive:

Barro (1991): Positive Impact of Human capital on growth: challenged by Bils and Klenow: most of the variation explained by the fact that human capital depends

n expected growth. Other challenges: Pritchett (2010)

Even individual country results hotly contested: China

Bosworth and Collins (2008): human capital unimportant for

China’s growth

Whalley and Zhao (2010): human capital is important!

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Castello, Chaudhary and Mukhopadhyay

Measurement of human capital is incorrect

Average years of education may not be the most

appropriate measure of human capital

Especially in poor countries with significant illiteracy

Quantity is not quality adjusted

Problems of cross-country analysis

Differences in culture, institutions and access to

technology make causal relationships hard to estimate

Potential Explanations for Discrepancy

Human Capital 3

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Castello, Chaudhary and Mukhopadhyay

We estimate the impact of tertiary education

completion on development using district-level data from India

Advantages of district-level analysis

More homogeneous units compared to countries

Night lights as a proxy for development (Henderson et al.

2012)

Tertiary education is correlated with development and

growth in India (Castelló-Climent and Mukhopadhyay 2013)

What do we do?

Human Capital 4

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Castello, Chaudhary and Mukhopadhyay

Evolution of tertiary education and income generally

go together

Include controls for geography, social structure and

historical factors that may influence tertiary education

Use exogenous variation generated by the location of

Catholic missions circa 1911 as an instrument

Is the location of missions endogenous?

History of Catholicism in India
Regressions using data from 1931 and 1901
Big push in setting up Catholic schools and colleges comes after

independence

Endogeneity of tertiary education

Human Capital 5

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Castello, Chaudhary and Mukhopadhyay

Significant positive effect of tertiary education

completion on luminosity

No weak instruments problem Robust to alternate definitions of development

Robustness checks suggest catholic missions did not

influence economic development through other channels

Health, Infrastructure, British India versus Princely States

Impact of tertiary education via service sector*

Findings

Human Capital 6

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Cross-sectional analysis of 500 districts in 20 states of

India (2001 vintage)

Measure of economic development

Night Lights 2006 (Defense Meteorological Satellite

Program (DMSP) satellites. National Oceanic and Atmospheric Administration (NOAA) of the USA

Pixel Luminosity 0 to 255 : Aggregated to the district

level divided by the total area of the district: Light Density

(Henderson et al, 2012; Michalopoulos and Papaioannou, 2013)

Data

Human Capital 7

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Castello, Chaudhary and Mukhopadhyay

Night Lights

Human Capital 8

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Castello, Chaudhary and Mukhopadhyay

District Level Education Shares (Census 2001)

Share of population 25+ who have completed tertiary

education

Degrees and diplomas in general and professional education

Other controls

Geography Proportion SC/ST Historical

Data

Human Capital 9

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Completed Level: Tertiary Education

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Mean: 5.8%

Range: 1.4 % to 21.3%

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Castello, Chaudhary and Mukhopadhyay Human Capital 11

5

5 Total Luminosity/Sq Kms (logs) .1 .2 .3 Share Pop. over 25 w/ Tertiary Education

Correlation: 0.46

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Castello, Chaudhary and Mukhopadhyay

State Fixed Effects Current share of SC/ST and population over 25 Geographic controls

Coastal Latitude, Longitude, Avg. Height, Avg. River Length

Historical controls

Share Brahman, Share Tribal, Urbanization, Railway line,

Princely State

OLS Specification and Controls

Human Capital 12

log lightdensityds = α + X βsDs + θshare tertds + ρ0Cds + π0Gds + δ0Hds + εds (1)

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Castello, Chaudhary and Mukhopadhyay Human Capital 13

1 s.d. (3 % point ) Increase in Share of Tertiary Ed leads to 7 % increase in light density (relative to mean)

Table 2: OLS Results - Log Light Density (1) (2) (3) (4) (5) Share Tertiary 14.396*** 11.203*** 10.638*** 9.871*** 8.019*** (1.136) (1.176) (0.921) (0.965) (1.077) Share Secondary 1.317*** (0.506) Observations 500 500 500 500 500 R-squared 0.624 0.705 0.793 0.804 0.807 State FE YES YES YES YES YES Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1 YES YES YES YES YES NO YES YES YES YES NO NO YES YES YES NO NO NO YES YES NO NO NO NO YES Controls State FE Current Geographic Historical Schooling

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We need an instrument to account for the potential

endogeneity of tertiary education

Must be correlated with 2001 tertiary completion Should meet exclusion criterion: not be correlated

directly with development

We use an indicator variable for whether a Catholic

mission/missionary was located within the area defined by the 2001 district

Catholic Missions in 1911 from Atlas Hierarchicus

Instrument

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Maps: Catholic Missions 1911 (South)

Human Capital 15

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Maps: Catholic Missions 1911 (North)

Human Capital 16

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Projected to Current District Boundaries

Human Capital 17

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Catholic Missionaries in 30% of districts

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Castello, Chaudhary and Mukhopadhyay

Syrian Christians (St. Thomas Christians) are the

earliest Catholics (1st century A.D.)

Catholic Church history begins with the arrival of the

the Portuguese in Calicut in 1498

Under Padroada Real (special ecclesiastical privileges

given to the Portuguese by the Pope), Catholic missions were set up in the 16th century

Initially Franciscans and Dominicans but then taken over

by the Jesuits after arrival of Francis Xavier in 1542

Catholic Missions: History

Human Capital 18

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Missions initially established in Portuguese strongholds

f Daman, Diu, Vasai and Mumbai along the coast (78

percent of catholic missions in 1911 are located in coastal districts)

Missions were then established in the interior.

Individual preferences of missionaries seem to have played a

role. For example, an enterprising Jesuit Robert de Nobili

moved to Madurai, pretended to be an upper caste Hindu, established the Madurai mission in order to recruit Brahmins into the catholic fold

Catholic Mission History

Human Capital 19

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Several instances of Jesuits trying to convert upper

caste Hindus whereas non Jesuits work to convert tribal populations

Mughal Emperor Akbar allowed Catholics to set up

missions in Gujarat but missionaries chose location: but not historic places of trade and production

First mission in Bengal was not in Calcutta

Catholic Mission History

Human Capital 20

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As Portuguese rule declined in the 17th century,

neither the native Indian rulers nor the East India Company were sympathetic to the Catholic cause. (especially the Jesuits)

Also the ecclesiastical dispute between Rome and

Portugal made it difficult for all catholic missionaries. Resolved only in 1885 by the Pope with a charter that established the Indian Catholic Church.

Most jurisdictions came under the Rome

Catholic Mission History

Human Capital 21

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In 1911, there were only 9 catholic colleges (as

compared to 40 protestant colleges): 5 percent of total colleges in India

Catholics largely absent from primary and secondary

schools

It was only in the 20th century, especially after the

reorganization of the church that they embarked on a extensive program of education

India today has more Jesuit priests at 3,851 than any

ther country in the world

Catholic Mission History

Human Capital 22

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Castello, Chaudhary and Mukhopadhyay Human Capital 23

Catholic Missions

Table 3A: Selection of Catholic Missionary Location?

Dep. Variable - Indicator for Catholic Missionary in 1911

(1) (2) (3) Coastal 0.314*** 0.345*** 0.269** (0.079) (0.110) (0.118) Longitude

0.029**

0.003

0.031

(0.013) (0.038) (0.046) Latitude

0.028*
0.003

0.052 (0.015) (0.039) (0.047)

Av. River Length
0.007

0.011 0.003 (0.005) (0.013) (0.014) Min Dist Big City

0.001
0.040
0.057

(0.017) (0.033) (0.035) Average Height 0.008* 0.060*** 0.041 (0.004) (0.018) (0.025) Railway Line, 1909 0.257*** 0.287*** 0.258** (0.043) (0.102) (0.112) Share Urban, 1901 1.739

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Castello, Chaudhary and Mukhopadhyay Human Capital 24

Share Urban, 1901 1.739 (1.094) Share Brahman, 1901 2.493 (2.103) Share Lower Castes, 1901

0.399

(0.639) Share Tribes, 1901 1.048* (0.558) Ethnic Frac, 1901

0.249

(0.611) Pop, 1901 0.000 (0.000) Income-Tax per Capita, 1901 0.771 (1.193) Colleges, 1901

0.020*

(0.011) Schools, 1901 0.000 (0.000) Constant 3.115***

0.367

0.828 (1.047) (2.391) (3.138) Observations 500 156 156 R2 0.297 0.360 0.408 State FE are included. Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

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Castello, Chaudhary and Mukhopadhyay Human Capital 25

Table 4: Instrumental Variables Results (1) (2) (3) (4) (5) Panel A: First Stage - Catholic Missionary on Tertiary Education Catholic Missionary 0.027*** 0.018*** 0.019*** 0.015*** 0.012*** (0.004) (0.003) (0.003) (0.003) (0.003) F-stat Excluded IV 57.27 26.74 28.85 20.17 17.28 Cragg-Donald Wald F-stat 90.19 37.73 40.37 28.07 16.16 Panel B: Second Stage - Log Light Density Share Tertiary 16.246*** 14.232*** 15.621*** 12.968*** 12.651** (2.264) (3.514) (3.089) (3.788) (5.010) Observations 500 500 500 500 500 R2 0.622 0.700 0.781 0.800 0.801

Controls State FE YES YES YES YES YES Current NO YES YES YES YES Geographic NO NO YES YES YES Historical NO NO NO YES YES Schooling NO NO NO NO YES Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1

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Castello, Chaudhary and Mukhopadhyay Human Capital 26

Table 4: Instrumental Variables Results (1) (2) (3) (4) (5) Panel A: First Stage - Catholic Missionary on Tertiary Education Catholic Missionary 0.027*** 0.018*** 0.019*** 0.015*** 0.012*** (0.004) (0.003) (0.003) (0.003) (0.003) F-stat Excluded IV 57.27 26.74 28.85 20.17 17.28 Cragg-Donald Wald F-stat 90.19 37.73 40.37 28.07 16.16 Panel B: Second Stage - Log Light Density Share Tertiary 16.246*** 14.232*** 15.621*** 12.968*** 12.651** (2.264) (3.514) (3.089) (3.788) (5.010) Observations 500 500 500 500 500 R2 0.622 0.700 0.781 0.800 0.801

1 standard dev. increase in Share of Tertiary (3 % point) leads to 9% Increase in light density given mean

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Castello, Chaudhary and Mukhopadhyay Human Capital 27

Panel C: Reduced Form - Log Light Density Share Tertiary 14.048*** 10.963*** 10.210*** 9.684*** 7.793*** (1.291) (1.242) (0.940) (0.986) (1.108) Catholic Missionary 0.060 0.058 0.101* 0.051 0.056 (0.072) (0.066) (0.056) (0.060) (0.061) Observations 500 500 500 500 500 R2 0.624 0.705 0.794 0.804 0.808 Controls State FE YES YES YES YES YES Current NO YES YES YES YES Geographic NO NO YES YES YES Historical NO NO NO YES YES Schooling NO NO NO NO YES Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1

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Castello, Chaudhary and Mukhopadhyay

May be correlated to completed tertiary education. Inclusion in the last column does not change the

coefficient of tertiary education

But we can do better:

Only completed schooling is an endogenous variable Instrument by Protestant Missions (Statistical Atlas of

Christian Missions , 1908)

Other levels: Only completed schooling

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Protestant Missions 1908: Projected to 2001

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Table 5: Instrumental Variables Results for Tertiary and Other Schooling (1) (2) (3) (4) Panel A: First Stage - Christian Missionary on Tertiary Education Catholic Missionary 0.025*** 0.017*** 0.018*** 0.014*** (0.004) (0.003) (0.004) (0.003) Protestant Missionary 0.005* 0.003 0.003 0.003 (0.003) (0.003) (0.003) (0.003) Panel B: First Stage - Christian Missionary on Other Schooling Catholic Missionary 0.034*** 0.023*** 0.022*** 0.014* (0.008) (0.008) (0.008) (0.008) Protestant Missionary 0.016** 0.017** 0.015** 0.013* (0.007) (0.007) (0.007) (0.007) F-stat Excluded IV 2.14 4.83 3.82 2.49 Cragg-Donald Wald F-stat 1.025 2.286 1.756 1.192 Panel C: Second Stage - Log Light Density Share Tertiary 36.846 21.984** 16.084* 13.217a (22.896) (11.143) (9.262) (9.331) Share Schooling

13.734
4.694
0.315
0.218

(14.686) (6.016) (5.484) (6.537) Observations 500 500 500 500 R2

0.038

0.607 0.778 0.799 Controls State FE YES YES YES YES Current NO YES YES YES Geographic NO NO YES YES Historical NO NO NO YES Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1, a p<0.15

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Castello, Chaudhary and Mukhopadhyay Human Capital 31 Table 6: Mechanism - Catholic Colleges (1) (2) (3) (4) (5) (6) Total literacy English Literacy Catholic Colleges Catholic Colleges Catholic Colleges Catholic Colleges 1931 1931 1911 1951 1971 2001 Catholic Missionary 0.002 0.000

0.003

0.082* 0.257** 0.427** (0.002) (0.000) (0.012) (0.049) (0.108) (0.202) Observations 500 500 500 500 500 500 R2 0.889 0.795 0.109 0.273 0.422 0.421 State FE YES YES YES YES YES YES Controls YES YES YES YES YES YES Robust standard errors in parentheses.*** p<0.01, ** p<0.05, * p<0.1

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Castello, Chaudhary and Mukhopadhyay Human Capital 42 Table 6: Mechanism - Catholic Colleges (1) (2) (3) (4) (5) (6) Total literacy English Literacy Catholic Colleges Catholic Colleges Catholic Colleges Catholic Colleges 1931 1931 1911 1951 1971 2001 Catholic Missionary 0.002 0.000

0.003

0.082* 0.257** 0.427** (0.002) (0.000) (0.012) (0.049) (0.108) (0.202) Observations 500 500 500 500 500 500 R2 0.889 0.795 0.109 0.273 0.422 0.421 State FE YES YES YES YES YES YES Controls YES YES YES YES YES YES Robust standard errors in parentheses.*** p<0.01, ** p<0.05, * p<0.1

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Robustness Checks

Human Capital 43

Table 7: IV, Validity of Exclusion Restriction - Log Light Density (1) (2) (3) (4) (5) Share Tertiary 11.727*** 12.915*** 13.481*** 12.856*** 16.661** (3.600) (3.787) (4.959) (4.370) (7.207) Observations 490 495 486 484 500 R-squared 0.780 0.801 0.798 0.800 0.786 State FE YES YES YES YES YES Controls YES YES YES YES YES Drop Light Density Outliers YES NO NO NO NO Drop Million+ City NO YES NO NO NO Drop State Capital NO NO YES NO NO Drop Largest City NO NO NO YES NO Any City, 1909 NO NO NO NO YES Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1

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Robustness Checks

Human Capital 44

Table 7: IV Robustness Checks, Other Channels - Log Light Density (1) (2) (3) (4) (5) (6) Share Tertiary 7.883** 13.955*** 12.130*** 12.990*** 13.093*** 13.004*** (3.911) (4.041) (4.134) (3.856) (3.649) (3.754) Observations 462 500 495 500 500 500 R2 0.810 0.799 0.806 0.800 0.800 0.803 State FE YES YES YES YES YES YES Controls YES YES YES YES YES YES Medical YES NO NO NO NO NO Religiosity NO YES NO NO NO NO Infrastructure NO NO YES NO NO NO Migration NO NO NO YES NO NO Europeans NO NO NO NO YES NO Pop-Density NO NO NO NO NO YES

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Other Measures

Human Capital 45

Table 9: IV - Other Measures in Logs (1) (2) ) Lights per Capita Consumption per Capita Share Tertiary 5.891* 3.551*** (3.454) (1.327) Observations 500 496 R2 0.757 0.728 State FE YES YES Controls YES YES

Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1

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Castello, Chaudhary and Mukhopadhyay

Impact of tertiary completion on luminosity is large

and significant

Long term impact of Catholic missions on current

utcomes

Not important historically for education

Supply increase after independence

Conclusion

Human Capital 46