This session will discuss the important effects of global contacts on human-capital formation. Given that, for many countries of the world, no comprehensive statistics on specific human capital components are available, this session will use the age-heaping-based numeracy estimates as well as other indicators of human capital. We will focus, in particular, on the effects that trade and migration had on its formation. Migration potentially results in brain drain effects, if the more educated people leave the country. Alternatively, numerical brain gain can occur, if the opposite is the case, as happened to a number of European countries in the mid-19th century. The human capital effects on the target country are given by the difference between the human capital of the migrant and the population of the destination country. Until today, there are heated debates about these effects of global contacts.
Another component of internationalization results from trade, especially in the periods of globalization. In the late 19th and late 20th centuries trade shares increased dramatically, and this had a number of interesting effects on human capital formation and numeracy in particular.
For example, the increasing trade with cash crops in poor countries yielded higher incomes, which usually resulted in higher educational investments. However, sometimes there were important side effects, such as increasing inequality, which resulted in higher educational inequality. Similarly, in this session, the effects on the countries which imported food will be considered, because in many industrial economies food crops were particularly scarce, and this had important consequences for the ability to learn and to acquire human capital. Likewise, international trade also resulted in resource-curse effects if the country was primarily exporting mining products or other primary goods, which often did not have such a strong learning-by-doing effect.
All these components will be addressed for a large number of countries for which new evidence on numeracy and human capital has only recently become available and provides substantial insights into understanding their long run development.