The lasting returns from investing in people

Ruins of St Michael of the Missions, Rio Grande do Sul. Photo Credit: Germano Roberto Schüür
Ruins of St Michael of the Missions. Photo Credit: Germano Roberto Schüür

Investing in education and vocational training can travel further than investment in infrastructure, a new research shows.

Writing for the Washington Post, Andrew Van Dam reports about a recent study by the University of British Columbia economist Felipe Valencia Caicedo, published in the Quarterly Journal of Economics. At the centre of the research, there are the Jesuit missions in South America.

The Society of Jesus reached the Guarani people’s homeland, at the crossing point among Brazil, Paraguay and Argentina, in the late 16th century, and their missions thrived until King Charles III of Spain expelled the order from the Spanish Empire in 1767.

According to the paper, at the present, the people living near of what remains today of the Jesuit missions complete between 10 and 15 percent more years of education. Their earnings are 10% higher than those for residents in equivalent towns but without missions.

Long fascinated by Latin America’s colonial past, Valencia found in the continent’s past the perfect field for his research. The isolated nature of these settlements allows to examine their developments free from influencing factors that may occur in metropolis.

Valencia brought together data from archives in the Vatican, Spain, Paraguay and Argentina. For every 100 kilometres closer to a mission, poverty rates fall 10 percent and schooling rises by about 0.7 years. The effect was more evident 75 or 100 years ago, as the historical figures show. With the national literacy rate approaching 100%, the gap diminishes. The findings, though, are enough to prove that the Jesuits’ training continued to influence education and society of the Guarani people near the missions for decades afterwards.

In the same journal, there is published also the analysis by Princeton economist Leonard Wantchekon, working with Marko Klašnja of Georgetown and Natalija Novta of the International Monetary Fund. They used different methodology but reached a similar conclusion by studying the long-term effects of early 20th-century missionary schools in Benin.

Both papers demonstrate how the benefits of schooling are contagious: the benefits of education persist for generations.

Valencia studied 30 mission  in which the Jesuits taught indigenous men and women blacksmithing, arithmetic and embroidery. When the members of the Society were expelled, the trainings stopped.

While the Franciscans - who arrived earlier and therefore stayed in the territory longer - focused on poverty and health, the Jesuits had education and vocation as their priorities. The Society of Jesus was forced to build their missions in unremarkable places: temperatures, terrain or climate are no more conducive to growing crops than in other areas and the rivers and coasts are also distant the same. All things considered, there are no extra factors that may have determined the distinct development of the population, except for the Jesuit teaching.

“Historical descriptions of the missions emphasize vocational training that went beyond agriculture to trades and service industries,” reads the Washington Post’s article. “Today, the areas near the missions are more industrialized than their neighbors, and they tend to have more people employed in industries related to the professions emphasized by the missionaries, such as blacksmithing and teaching.”

“It’s not that things are immutable,” it is reported Valencia said. “It’s that precisely because of this historical human capital shock, that people can change faster and can adapt faster to change.”

The shock in this case is a mission, whose educational and cultural mark is strong evidence of the long-term effects of investing in people.

Read the full article on the Washington Post website.