Land-Rich economies, education and economic development

We analyze the emergence of large-scale education systems in a framework where growth is associated with changes in the configuration of the economy. We model the incentives that the economic elite could have (collectively) to accept taxation destined to finance the education of credit-constrained workers. Contrary to previous work, in our model, this incentive does not necessarily arise from a complementarity between physical and human capital in manufacturing. Instead, we emphasize the demand for human-capitalintensive services by high-income groups. Our model seems capable to account for salient features of the development of Latin America in the nineteenth century, where, in particular, land-rich countries such as Argentina established an extensive public education system and developed a sophisticated service sector before starting significant manufacturing activities.Fil: Galiani, Sebastián. Universidad de San Andrés; ArgentinaFil: Heymann, Carlos Daniel. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Comisión Económica para América Latina; ArgentinaFil: Dabús, Carlos Darío. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Bahía Blanca. Instituto de Investigaciones Económicas y Sociales del Sur. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; ArgentinaFil: Tohmé, Fernando Abel. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Bahía Blanca. Instituto de Investigaciones Económicas y Sociales del Sur. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; Argentin