What is the long-term effect of investing in human capital? The case of Jesuit missions

May 4, 2021

[vc_row][vc_column][vc_column_text] Responsible researcher: Adriano Valladão Pires Ribeiro Article title: THE MISSION: HUMAN CAPITAL TRANSMISSION, ECONOMIC PERSISTENCE, AND CULTURE IN SOUTH AMERICA Article author: Felipe Valencia Caicedo Location of intervention: Argentina, Brazil and Paraguay Sample size : 549 municipalities Sector: Others

Type of Intervention: Effect of Jesuit missions Variable of main interest: Human capital

Evaluation method: Others - Natural historical experiment Policy Problem The transmission of human capital has long-term impacts, being an important factor in explaining economic results in the future. The Guarani Jesuit Missions that lasted between 1609 and 1767, in South America, had a primary religious objective, but they also invested in education, mainly in the schooling of young people and training for adults. The economic impacts of the missions can be seen even today in the affected locations. Assessment Context The Jesuit Order arrived in South America in 1549 in the city of Salvador, Bahia, and the missions soon spread to different areas of the Portuguese and Spanish empires that are today in Peru, Bolivia, Colombia, Venezuela, Brazil and Mexico. Although the main objective was the conversion of believers to Christianity, the Jesuits taught children to read, write and basic arithmetic operations, in addition to training adults in masonry, carving and embroidery. The value of education for the Jesuit Order is also highlighted, being at the technological and cultural frontier of its time with contributions to the arts, music, cartography, linguistics, mathematics, among others. In turn, the Guarani missions were among the main ones of the Order, where the first mission took place in 1609 on the outskirts of Asunción, in Paraguay. In total, the Guarani Jesuits founded 30 missions (15 in Argentina, 8 in Paraguay and 7 in Brazil) and, at their maximum, had a population of more than 120 thousand people. The area was made up of just one indigenous tribe that was in the early stages of development, did not have weapons or iron tools, were not fixed in the same place and had some corn and cassava planting techniques. Finally, the expulsion of the Jesuits from Portuguese and Spanish lands took place in 1767 after political disputes in Europe. The following year there were no more Jesuit missionaries in the region and they never returned. Intervention Details To study the long-term effects of the Guarani Jesuit Missions, data was sought from the locations where the missions took place, which totals 549 municipal observations from the 3 countries involved. The historical files contained the location of the missions, the year of foundation, population and the work carried out. Information from censuses carried out in Argentina, Brazil and Paraguay at the end of the 19th century and the first half of the 20th century was also used. The most recent information in the area comes from censuses carried out in the 21st century. The main variables refer to education, income, geographic conditions and climatic factors. Methodology Details The data highlighted above allows us to causally relate the current level of human capital and income in municipalities with the presence or absence of Jesuit missions in the 17th and 18th centuries. This is due to the expulsion of the Jesuits due to factors exogenous to the mission locations and the religious intervention taking place at an early stage in the development of the local population, which would further highlight its importance for social, economic and cultural indicators later on. The causal link is also supported by other factors. First, historical archives suggest that the foundations of the missions did not follow any obvious principle, being the result of adventure and randomness. Second, geographical and climatic conditions that could influence the founding and development of the localities, such as altitude and proximity to rivers, were taken into account in the analysis so that their interference would not reflect on the results. Finally, there were also missions from other orders, such as the Franciscan, allowing comparison of the effects of interventions between them. Results The relationship between the literacy rate of the population aged 15 and over and the distance from the nearest Jesuit mission is negative, that is, the further a municipality in the region is from a location that housed a mission, the lower the literacy rate in the present day. The estimated effect suggests a reduction in illiteracy of at least 10% for municipalities less than 100 km away from a Jesuit mission. The impact is similar when considering the median years of schooling for Brazil, proximity increases the value by almost 15%. Current income and distance from a Jesuit mission also correspond negatively, that is, municipalities with higher income are closer to the mission area. Per capita income increases by around 10% in these locations. Next, the Jesuit missions are compared with the Franciscan Guarani missions, since both are Catholic orders that worked in the same area. It is noted that elements such as the determination of the location, the European indigenous relationship, and climatic and geographical conditions are common to both missions. On the other hand, the Franciscans did not emphasize the formation of human capital in their conversions. Unlike municipalities close to Jesuit missions, Franciscan proximity had no effect on the literacy rate and income today. Among the mechanisms responsible for the persistent difference in human capital and income are occupational specialization and technological adoption. It was found that individuals who participated in religious missions receiving education and technical training left agricultural activities to start artisanal activities, such as commerce and manufacturing. Furthermore, areas with greater human capital due to the presence of Jesuit interventions were able to incorporate new agricultural technologies and grow more quickly. Public Policy Lessons The Guarani Jesuit Missions (1609 - 1767) had a long-term effect, impacting both literacy and schooling and income in localities close to the missions. It is also noteworthy that these effects were exclusive to Jesuit interventions when contrasted with Franciscan interventions, especially due to the focus on the accumulation of human capital by Jesuits. The results reinforce not only the importance of investment in human capital for long-term economic development, but also the historical role of institutions. Reference CAICEDO, Felipe V. “The Mission: Human Capital Transmission, Economic Persistence, and Culture in South America”. The Quarterly Journal of Economics, Volume 134, Issue 1, February 2019, Pages 507–556, 2018. [/vc_column_text][/vc_column][/vc_row]