This paper investigates Becker, Hornung and Woessmann's recent claim that education had an important causal effect on … Prussian industrialization and finds it unwarranted. The econometric analysis on which this claim is based suffers from severe … problems, notably the omission of relevant variables which leads to serious bias in the estimated effect of education. When …

and landowners). Industrialization requires the elites to finance schools and the masses to attend them. Schooling raises … productivity, particularly for matches between masses and bourgeois. At the same time, only country-wide education ("unified … education") or the regionally dominant group can choose to implement schooling in its own region but refuse to share the costs …

urbanization. We also find positive and significant effects of industrialization and education on urbanization, consistent with the …