Spatial Inequality and Human Capital Formation in the Transition of European Russia to the ‘Modern’ Type of Economic Growth (Late 19th to Early 20th Centuries)

Abstract

This article analyses spatial inequality in human capital formation in Russia during the transition to industrial development in the pre-revolutionary period. I employ annual governors’ reports as the primary source of statistical data on financing education and health care. Using this data, I identify the patterns of human capital dynamics in various regions of Russia and discuss them against country-wide trends. My analysis reveals that Russia featured impressive rates of human capital formation, primarily through education, in the late 19th century and in the early 20th century. However, the processes of human capital formation in the Russian regions proceeded unevenly. In some cases, the regions changed their ranking in the financing of education and health care. I also apply the models of inequality dynamics by Kuznets (an inverted U-shaped curve at different stages of modern economic growth), Barro and Sala-i-Martin (β-convergence and σ-convergence in unified political space). My findings suggest that in the period under study there was some convergence between the Russian regions in terms of educational enrollment and the amount of financing. Modest reverse processes were in force as regards funding per student and basic indicators of health care (access to medical personnel for the population, and financing). The study further reveals the factors which were driving the changing structure of the institutional sources of financing. Declining interregional differentiation in education was associated with the increasing share supplied by the central government and the declining share supplied by local governments (however, the central government’s share remained relatively modest in health care). This new evidence supports Gerschenkron’s idea of the elevated role of government in the socio-economic development of ‘backward’ countries undergoing catch-up modernization.