Local institutions and human capital formation in pre-industrial societies: evidence from Valencia

Abstract This article analyses the relationship between institutions and human capital formation. We use literacy rates in 1860 at the municipal level in Valencia where the expulsion of the Moriscos in 1609 was followed by the Christian resettlement. Our findings show that male literacy was consistently lower in Morisco areas by mid-19th century. Yet, the analysis also shows the disappearance of this effect at the beginning of the 20th century. We argue that the deployment of the liberal state would have entailed the gradual decoupling of educational outcomes from the institutional heterogeneity characteristic of the Old Regime.