Italy, A Showcase For Why Human Capital Matters

One of the key criticisms of my last post on the tight connections between (educational) human capital and economic performance is that correlation need not imply causation. An alternate (and PC-compliant) explanation is that “you get the education system you could afford, and the level of human capital in the kids is mostly determined by the efficiency of the schooling system.” Is there any evidence to support this argument?


As a country with a long history of normal capitalist development, and with no regions enjoying particularly lucrative resource windfalls, it is not a surprise to see a close exponential correlation between my Human Capital Index (see methodology here) and Italy’s GDP (PPP, in US dollars) per capita (R2=0.7302).


Furthermore, when we note that one of the major outliers hosts the Italian capital, and remove it, the correlation becomes even more impressive (R2=0.8221), equaling that of the Capitalist Normal countries as a group. Removing the other major outlier, Apulia, and the Germanic South Tyrol, makes the correlation almost perfect (R2=0.9461).

Is there anything like that kind of correlation between public expenditure per pupil (which according to Italian statistics has an almost perfectly linear relationship to numbers of teachers per pupil, which is one of the best proxies we have for school quality) and academic results? Not at all. (R2=0.0544, linear)


This does not strictly prove anything, but it is a good argument for the relative lack of importance of funding levels towards academic success. There appear to be hard limits to the human capital money can buy. After all, Italy’s education system is highly centralized, with a difference of a mere 20% between the highest and lowest spending provinces on education (it is also well known that it is socio-culturally variegated to a much greater extent than your typical European country, which makes it a good laboratory for social science experiments). Nonetheless, they produce a wide range of outcomes; for instance, whereas the best-performing provinces like Trentino and Friuli-Venezia Giulia get results similar to that of the Netherlands, the worst-performing ones like Calabria and Sicily have countries like Turkey and Bulgaria for company.

(A quick note about the outliers. The South Tyrol is a minor positive outlier; perhaps it can be explained by its Germanic background with its special discipline and technical skills culture. The big positive outlier, Lazio, isn’t a mystery; it hosts the capital Rome, and these regions always tend to have their GDP’s artificially boosted by the massive state presence in them. But most curious is Apulia, a massively negative outlier, which hugely outperforms all its Southern neighbors but remains one of the three poorest Italian provinces, its GDP (PPP) per capita comparable to Poland’s. Anyone have theories on why that is the case?)

Education is very important, being intricately connected with potential for productivity growth and increasing prosperity; it deserves a lot of funding, and optimizing reforms. But as Italy glaringly demonstrates, the potential for developing human capital is constrained by some combination of social, cultural, and ethnic factors; factors that can be partially mitigated but not overcome by throwing money at them. There are plenty of other examples to back this up. For instance, inner city schools in the US get a lot more in the way of funding than suburban ones – let alone average Chinese schools, which have been de-emphasized in the reform era. Nonetheless, the human capital generated in the latter two institutions far exceed that generated in the US inner city schools.

Next in this series: How to reconcile Israeli idiocy (as measured by the HCI) with Jewish intelligence (as measured by IQ tests, Nobel Prize winners, etc) – any preliminary theories?, and perhaps on how they also challenge some stereotypes about Georgians.

Anatoly Karlin is a transhumanist interested in psychometrics, life extension, UBI, crypto/network states, X risks, and ushering in the Biosingularity.


Inventor of Idiot’s Limbo, the Katechon Hypothesis, and Elite Human Capital.


Apart from writing booksreviewstravel writing, and sundry blogging, I Tweet at @powerfultakes and run a Substack newsletter.


  1. You have done a good job showing that state spending on education cannot explain the score results. So that removes the “GDP driving education scores via trickle down” causality. You are left with, potentially, GDP driving the cultural and other factors that appear to differentiate the regions. But that is dubious. How would GDP affect culture differently in different regions of a not-so-large country like Italy? Is it some characteristics of GDP (not the aggregate amount) that are important? For example, if the GDP is driven by tourism vs. industry?

    Keep making more of these posts!

  2. georgesdelatour says

    I’m sure you’re on to something, Anatoly. I suspect it’s a mix of the crude IQ potential of the human raw material and the social cohesion of the collective.

    Yes, East Asians and Finns may have a genetic advantage. But they may also have a cultural advantage too. These top of the PISA chart societies are all relatively conformist, monocultural societies.

    When confronted with disappointing PISA scores, English commenters tend to say, “we must copy the education system of Finland”. But we are not Finland.

    Almost one in five school kids in England doesn’t speak English at home. In inner London it can be as high as four in five. Yes, there’s the odd Mandarin-speaking daughter of a high-flying HSBC executive; but it’s mostly poor kids whose parents came from third world countries like Somalia and Bangladesh. In Helsinki it’s one in 50 school kids who don’t speak Finnish at home: and these kids’ non-Finnish parents are mostly Estonians and Russians with graduate degrees. So right from the start the English system has a heavier load to carry than the Finnish system.

    • England has been a magnet for immigrants since the invention of the steam engine. Finland since the widespread use of mobile phones. That is a better explanation of the difference between home language use.

      ps. This is even that the English numbers are believable. I seriously doubt that one in ten kids in England is Eastern European or Indian. And those have to be the numbers if what you say is true.

      • georgesdelatour says

        Hi Charly

        I was writing from memory, and I’ve confused the “ethnic minority” figures with the “English not first language” figures. So it seems I’ve exaggerated – sorry! But not by much:

        “In primary schools, 26.5% of pupils are from an ethnic minority, compared with 21.9% five years ago. In secondaries, 22.2% of pupils are from an ethnic minority, compared with 17.7% five years ago.
        The statistics, taken from the School Census and surveys completed by local authorities, show the proportion of pupils whose first language is not English has risen to 16.8% in primary schools, from 13.5% five years ago.
        In secondaries, the proportion of pupils whose first language is not English is 12.3%, compared with 10.5% five years ago. In the east London boroughs of Tower Hamlets and Newham, the proportion of primary school pupils whose first language is not English is 78% and 74% respectively.”

        In the last 10 years the UK has experienced a fair bit of immigration from non-Commonwealth, non-EU countries – from north Africa, Somalia etc. Also, the Mirpuri Pakistani and Sylheti Bangladeshi communities have the highest birth rates:

        “A baby boom among immigrant families is driving the population to a record high, government figures will show this week.
        The figures, from the Office for National Statistics, will reveal that Britain’s highest birth rates are in the Pakistani and Bangladeshi communities, both predominantly Muslim.
        The birth rate among women born in Pakistan but living in the UK is three times higher than that among British-born women, the figures will show.”

        • Ethnic minority doesn’t mean English is not the language at home. I seriously doubt many West Indians speak something else than English and that is what i see as photo comment in the guardian story

          But the big problem is that i don’t see how you can get this numbers of 16.8% with the not exactly massive influx of immigrants into England. (England has now immigration of 1% a year)

          • Dear Charly,

            You can have schools where the proportion of children with a non-English-speaking background is completely out of wack with the proportion of NESB people in the community surrounding the school and in the country generally. This is because people send their children to schools for a variety of reasons and geographic proximity often comes last on the list of reasons.

            Immigrants as a proportion of the overall population are not a guide to immigrant and first-generation children as a proportion of the overall school population. Immigrants may have bigger families and some migrants may secretly practise polygamy and be supporting two or more sets of children. Many children attending school might have come from overseas and are staying with relatives.

            In Sydney, there is a school, Canterbury Boys’ High School , where 90% of the students don’t speak English as a first language. Languages spoken at the school include Chinese, Vietnamese and Lebanese Arabic. There are also many boys with an African or Polynesian heritage attending the school. Not all the kids who go to the school are drawn from the immediate area surrounding the school; many come over from Lakemba which has a large Arabic-speaking population.

            At Lurnea High School, located in the Liverpool local government area in southwestern Sydney, 70% of the students there don’t speak English as their first language. Many if not most LHS students speak Arabic at home.

            There’s no way the kids at these schools can be considered representative of the Australian population as a whole!

            It is entirely possible then that in the UK, even though immigrants might make up less than 5% of the country’s population, immigrant and first-generation British children of immigrants can constitute 16% of the country’s primary school children.

            • Where did i say there were no schools which were dominated by Non English speakers.

          • I should have added too that if a school offers free daily breakfast and lunch, that in itself is a big drawcard for migrant families not in that school’s zone who might otherwise keep children at home or send them elsewhere!

            The other thing too is that immigrants as a demographic group are often younger than the general population and more likely to be of child-bearing age. This is particularly so in countries where the population is ageing and the overall median age is in late 30s / early 40s whereas for migrants it’s lower.

      • georgesdelatour says

        “England has been a magnet for immigrants since the invention of the steam engine. Finland since the widespread use of mobile phones. That is a better explanation of the difference between home language use.”

        Don’t you think it’s actually the mobile phone type technology – satellite dishes, the internet, and the jet engine – that’s preventing new immigrants to the UK adapting to English quicker? I was thinking of the French Huguenots who came to England in the 17th century. As Wikipedia states, “an estimated 50,000 Protestant Walloons and Huguenots fled to England, about 10,000 of whom moved on to Ireland around the 1690s. In relative terms, this could be the largest wave of immigration of a single community into Britain ever.” They were cut off from France, and had English neighbours. They couldn’t send their daughters to marry first cousins back in France, either. So they Anglicised very quickly.

        • Huguenots lived in ghetto’s where they didn’t go to English speaking schools, didn’t need to read labels in English, didn’t have to fill in forms written in English and went to work for Huguenot bosses so it makes absolute sense that they learned English faster.

  3. AK, good job showing that state spending is not necessarily responsible for the human capital development and instead it is the quality of schooling (not necessarily how many teachers or money you have in the system – so quality over quantity). However I was starting to notice a north-south pattern in your discussion and so began looking for a map of Italy’s provinces only to realize that you were referring to Italy’s regions (the provinces being for example Foggia, within the region of Apulia). Have you looked into the results on a north-south basis? That might help explain the Apulia result (it’s in the south, plus unlike say Calabria it would be unlikely to receive much in the way of state support since it is on the road to nowhere unlike Calabria which is close to Sicily).

    “Education is very important, being intricately connected with potential for productivity growth and increasing prosperity; it deserves a lot of funding, and optimizing reforms. But as Italy glaringly demonstrates, the potential for developing human capital is constrained by some combination of social, cultural, and ethnic factors; factors that can be partially mitigated but not overcome by throwing money at them. There are plenty of other examples to back this up. For instance, inner city schools in the US get a lot more in the way of funding than suburban ones – let alone average Chinese schools, which have been de-emphasized in the reform era. Nonetheless, the human capital generated in the latter two institutions far exceed that generated in the US inner city schools.”

    Well inner city schools are also plagued by truancy and delinquency aren’t they? Or at least that is the typical stereotype. The inner city environment doesn’t provide an ideal environment to actually learn. Average Chinese schools would probably be in urban (not necessarily inner city areas) or rural zones. Either of those environments would seem to be better for prospective students – you don’t have high crime which makes life more difficult and provides an alternative lifestyle (rural children can either become educated or live like uneducated rural persons would – which is generally not in gangs; but inner city children can either become educated and move on to other environments or simply not get educated or not get a proper education and remain stuck in the inner-city area and perhaps turn to a life of crime). I would also imagine that nutrition would differ greatly between inner-city areas on one hand and just about everywhere else on the other hand. How would access to the proper nutrition affect the PISA scores?

    • georgesdelatour says

      Hi Hunter

      I don’t know if you can access this BBC radio show (maybe as a podcast on iTunes):

      “The government’s brought in new style league tables to help parents choose schools. But do we really know what makes a good school? And how far can schools really transform lives? Researchers have long believed in a so-called ‘school effect’ that counters, at least in part, factors such as social and family background. But how easy is it to measure this kind of effect, and can parents really be given a clear guide as to which school is best for their child? Or has too much emphasis on factors such as social background made schools complacent about what they can achieve?
      Fran Abrams talks to head teachers, educational experts, the schools minister and the new head of Ofsted as she investigates what difference schools can really make.”

  4. Viktor (Not that Victor) says

    Ja ja the more German genes there are, the more productive the part of Italy is, jawhol?

  5. Dear AK,

    Do Mafia-type organisations have any influence or cultural significance in Apulia? I am wondering whether Apulia has a history of Mafia organisations in its culture in the way Sicily has (has had?) La Cosa Nostra, Calabria has L’Ndrangheta and Naples and Campania have La Camorra. These networks could have a history of creaming kids away from family, school and church as recruits to replace ageing members. If young people have a choice of school and hard work on one hand and an easy, get-rich-quick life offered by Mafia groups on the other, what will they choose? There’s also the possibility that kids are recruited into Mafia organisations at birth and when they reach their teenage years, they may be required to leave school at a young age and start working for the Mafia.

    On the subject of Mafia organisations, what percentage might they account for the economic performance of the southern Italian regions? I’ve heard there are industries in south Italy that are controlled wholly or partly by Mafia organisations: waste management and disposal seems to be their specialty.

    In the 1990s when Somalia became unstable, Mafia organisations began to dump radioactive waste in Somali territorial waters. At about the same time, Japanese and Taiwanese fishing trawlers turned up to fish in the same waters. Since coastal Somali communities depended on fishing for their livelihoods, they began clashing with the commercial trawlers and the Mafia ships. The communities started to police the waters as s volunteer coastguard and this is how Somali piracy began.

    If Mafia organisations are active in southern Italy in a major way, then we need to be careful interpreting the GDP figures for these areas as these organisations’ activities might not be covered by official government statistics collection.

    L’Ndrangheta is a huge worldwide organisation. It’s been in Australia for at least 60 years and among other things was responsible for killing the anti-drugs campaigner Donald Mackay in Sydney in 1977. His murder made national headlines at the time and gave Griffith, a country town in New South Wales, an undeserved reputation as some sort of gangland capital.

  6. The Israel vs Jews discrepancy is at first glance obvious imo, the smart Jews you refer to are Ashkenazis who are overrepresented in Norther Europe and America while in Israel you’ll find many more Sephardim/Mizrahim/Black Jews and Palestinians who all score notoriously lower on Iq tests. The matter is coupounded by the orthodox Jews in Israel who live on welfare, have 7/8 children per woman and give them a very low formal education (in languages, science and maths) according to an article I once read even worse than third world children. Given that orthodox and palestinian kids are more and more overwhelmingly populating Israeli schools, I was not surprised at all by the results.

    I suspect Anatoly that you deem ethnicity as a more determining factor than your last three posts show. It may well be so, but if we accept it’s true there must be an explanation as to why that is and how that happened. I of course dismiss racialist bs which says that some ethnic groups are forever and ever better than others. All the History of Europe points to the contrary, with Germanic peoples and in fact most of Western Europe much less developped and its peoples less advanced relatively to other civilizations for most of recorded history and even not so long ago. Italy is an excellent exemple because the North/south divide was pretty much the opposite before and in the early stages of Rome and nothing indicates that the base populations are wholly different (migrations occurs but most of the time have a more marginal impact than tought).

    Once we accept the premise, there would be only one explanatory mechanism : selection. But in what context? Industrialization seems a way too short time span, much less in Italy, Germany, Japan , China…but even in England. Darwinian selection is an extremly slow process, sexual selection is much faster but still not enough in the industrialisation era to explain everything imo. We aren’t aware that heavy polygamy was the norm in contemporary Europe, to the contrary. If not modern industry, literacy? My feeling is that it’s not enough, so I would tend to favor the existence of complex technics, craftsmanship and manufacturing in pre industrial context : for centuries some regions were specialized in peculiar productions, in the context of the early development of capitalism while others largely retained base agriculture as a the only means of subsistence. These are only unsupported guesses, but all in all I wish people who dwell on ethnic differences in economic development would try to research the matter and potential causes more toroughly rather than just say Northern Asians and Europeans/Jews this, Africans and Arabs that etc… even when using relevant statistics.

    Another criticism since we were talking of Israel, is that while the average human capital is low, the country is specialized in high technologies : innovative startups, military hardware, theorethical research of the highest world standards. And they also explain their economic successes, with ratios of engineers/population and patents per capita extremely high in world rankings . American aid and academic exchanges and offshoring can’t explain everything.
    It seems to me Anatoly that having just a fraction of extremely intelligent people can provide aline economic and technological advance. I’m not familiar with the economic literature you mentioned, which explains the relation between human capital and economy. Yet may be is it just a prejudice from me but doesn’t it appear clear that training and education is important only to a few categories of jobs, the rest and majority being mostly repetitive and menial works? I mean if we use the traditional primary/secondary/tertiary sector division, it appears clear that most of the two formers don’t need much intelligence for much of their workforce and a large chunk of the third (secretaries, shopkeeping, services to individuals, cleaning etc…) also don’t need very bright profiles.

    More useful is Robert Reich new categorization:

    “Reich divides American jobs into three broad categories for assessing their contribution to new the global economy. These are “symbolic- analytic” services, routine production services, and “in-person” services. The first of these is carried out by what Reich calls “symbolic analysts” engineers, attorneys, scientists, professors, executives, journalists, consultants and other “mind workers” who engage in processing information and symbols for a living. These individuals, which make up roughly twenty percent of the labor force, occupy a privileged position in that they can sell their services in the global economy. They are well-educated and will occupy an even more advantageous position in society in the future.

    Routine production workers and in-person service workers will fare much worse in the new economy, according to Reich. Routine production workers include those who perform repetitive tasks — assembly line workers, data processors, foremen, and supervisors. Examples of in- person service workers are waitresses, janitors, hospital attendants, and child care workers. These two categories of workers do not compete in the global work force and are at a considerable economic disadvantage. This is especially true of routine producers. The future of service workers is less clear cut since their services are in demand by symbolic analysts.”

    in this case only the ‘symbolic analysts’ need to be of high human capital, which may explain Israel.

    • Dear Albo,

      There was an online article I saw several weeks ago that compared business cultures in Israel and Japan which might interest you with respect to Israeli innovation. The article pinpointed the flatness of organisational hierarchies (that is, there are few or no levels of management between the lowest level of staff and the highest) and the informal nature of dealings among people as factors spurring creative thinking. If you would like to see the article, here is the link:

      Having served in particular units in the IDF might be an influence; if your boss discovers you served in the same unit s/he did years ago and did similar work as s/he did, that in itself could create an informal bond that favours creative thinking and innovative work. You will also have contacts in the military who can supply you with ideas or scenarios that require original thought and solutions to solve them.

      Re the Robert Reich article: I read the book review and will comment that in an economy where customisation becomes the norm over standardisation, work and work processes that emphasise the fragmentation of work into a series of repetitive tasks should disappear and only work that involves supervising customising technology such as 3-D printing should remain. (I say “should” because we don’t know if such work will turn out that way.) Some in-person service work will still exist – how much this work can be done by robots or other machines becomes the issue. (Can robots provide child care? On the other hand Japanese researchers have created a robot that can cook omelettes.)

      As for “symbolic analysts”, they can certainly sell their services on the Internet and on the cloud but they may end up competing against their counterparts in other parts of the world and this competition may have the effect of lowering their salaries and working conditions (and lowering their cultural value as well) across the world. Basic accounting and legal work in Australia is already being outsourced to India; the legal firm I work for is under pressure from its clients to outsource basic work to cheaper Indian law firms. No doubt the same kind of thing is happening at the accounting firm where I used to work before 2007.

  7. If standard deviation were provided along with average this might explain a little more, especially in countries with heterogeneous populations.

  8. I’m a big nerd, so most of the comments I’ve gotten from others over the years about reading and studying were of a discouraging kind. “Why don’t you play outside with others like all the normal kids?”, “oh my God, he’s on the computer again”, etc. I’m not saying that these people were wrong, just that they were ineffective. Their message fell on deaf ears.

    In the PC worldview educational underachievement results from a shortfall of spending and encouragement. But most of the nerdy stuff I know, I learned outside of the classroom, and I definitely did not learn any of it to please my family. They would have been far happier with a less nerdy, more social me.

    I think that some people just like the process of learning. Since we have muscles, we periodically get an urge to stretch them. It’s uncomfortable to sit in one place for hours. I think that those who have brains want to periodically “stretch” them too. Otherwise they’re bored. There’s an internal need.

    The people who get first-rate educational opportunities for which they did not honestly qualify do not as a rule project an air of intelligence. G.W. Bush went to Andover, Yale and Harvard Business School. These institutions failed to make him a smart man. Our current First Lady went to Princeton and Harvard Law School. I’ve seen her talk on TV, and it is my judgment that these first-rate institutions failed to make a smart woman out of her. History tells us that the buffoonish emperor Nero was tutored by the philosopher Seneca. And worms cannot be taught to fly.

    Then why is education such a big business? Well, why is fortune-telling a big business? In order to thrive, a business doesn’t need to be effective at its stated purpose. It only needs to convince some portion of the public that it’s effective at it.

    “Next in this series: How to reconcile Israeli idiocy (as measured by the HCI) with Jewish intelligence (as measured by IQ tests, Nobel Prize winners, etc) – any preliminary theories?”

    If I remember correctly (I may not), Lynn’s estimate of Israel’s mean IQ was 94. I think the Israeli Ashkenazi mean was 104, the Sephardi mean 91. If the Ashkenazi mean in Europe and America is roughly 113, why is it 104 in Israel? Presumably because the prospect of tilling land in a kibbutz or going out on patrols with an Uzi had low appeal to the smarter segments of the Ashkenazi community. As far as I know, pretty much all of the Ethiopian, Yemeni, Sephardi Jews are in Israel, but only a minority of Ashkenazi Jews live there.

  9. A little more on this:

    A few weeks ago I saw an interview on YouTube with the creator of the popular TV show Community. He said that the idea for that show came to him when he enrolled at a community college while in his 30s. He scored really well on a few tests there, and so other students started asking him to lead a study group. In the interview he said that he did not understand what exactly they expected him to do during the study group’s meetings. Open their skulls and sprinkle knowledge directly onto their brains?

    I’ve never been to a community college, but I’ve been in that situation. What do they want me to do? Formulate the laws of physics better than the people who wrote the textbook? I can’t do that. Do they think that I’m hiding some sort of a shortcut from them?

    Why do people go on pilgrimages? Is it because they imagine that being close to holy objects helps them pick up some of the holiness through the air? Millions of people from every major religion go on pilgrimages every year.

  10. Thanks. Fascinating stuff.

    I realize I spent a couple of days in Apulia in 1980, in Brindisi and Lecce. A poor place, but, now that you mention it, the locals struck me at the time as quick-witted, but kind of hostile and antisocial. Who knows how accurate that appraisal was or remains?

  11. Anatoly,

    do you care to get a PhD in econ – I know a good professor or two at Berkeley – but please, don’t show them these posts! 🙂 – many economists are extremely good at methodology but can’t ask good questions.

    Lack of correlation between number of teachers per student and student performance, however measured, is a well known problem which flies into face of our intuition. On the country level, it is very hard to prove anything, as many other things (culture, including homework habits, etc.) cannot be controlled for. On the school district or school level, the most popular explanation is that number of students per class is an endogenous variable – school principals are likely to put their best teachers into poor classes, and make those classes smaller, in order to improve the results. Of course, this logic works if the principal has an incentive to improve performance of worse pupils, and those incentives are stronger than attempts to make the good students even better.

    Similar nest of problems arises on the regional level. A region would be able to beg for more transfers from the center if they have demonstrable needs. Poor performance by the students is such a need, and thus we are likely to see poorly performing regions receiving higher transfers – perhaps to the point when total expenditures per pupil (coming both from the region and the center) are more or less the same, but the performance is very different. (And we have no idea whether it’s this year’s money that matters for the educational outcomes, or an integral of educational expenditures over the last generation, or what, so we don’t even know what’s the proper variable to be looking at.)

    The last problem, BTW, is the reason why it’s so devilishly difficult to get to the value of fiscal multiplier and to put a number onto the effect of fiscal stimulus on jobs and regional output. Hard hit regions were likely to be getting more, and a simple correlation might tell you that the states with highest amount of stimulus money performed the worst, therefore, stimulus was killing the jobs.

    So, beware of simple correlations! On the other hand, any good empirical paper starts from a visible correlation. It’s just that the mechanism working to produce one is often very different from what a simple 2D graph would led you to believe.

  12. Alberto Tidu says

    Really interesting article. As an Italian citizen, I can advance my hypothesis about the “Apulian difference”. Similarly to the other Southern Italian regions, Apulia has experienced a massive emigration pattern since Italian unity as one State in 1861; such phenomenon is still present and strong nowadays and many Southern students are enrolled in Northern Italy universities and they tend to settle down in Bologna, Turin or Milan after graduation because of low wages and almost none chances to get a job in their native regions, where unemployment is sky-rocketing and under-employment is even a larger issue. Apulia is largely affected by Mafia as every region in Southern Italy. So what could be an explanation for the aforementioned “Apulian difference”? Apulia has been for a couple of decades now the center of a sort of “Southern moral renaissance” with liberal politics and a growing focus on education. Thus, I believe that Apulian students are actually more educated than other Southern Italian students, but they mainly contribute to Northern Italy GDP instead of their native region’s, because of the reasons I mentioned above.

  13. As for Israel, they pay a lot for defence by being in the military and buying weapons. This means a reduction of productive capability due to capital drain and human drain by psychological war damage. Furthermore, they have to finance the increasing numbers of orthodox Jews who don’t consider it necessary to work, but have a numerous offspring.

    If you look at the performance of educational investments from a different perspective, the child or teemager is in a human environment. If this environment encourages extreme success in the field of acquiring specific skills through education, then the person is more likely to make his highest obtainable achievement in that field because of a positive human environment feedback. If the environment stresses other interests for advancement, then the person will likely take a different route. East Asians for example have a higher tendency to be douchebags in sports with outstanding skills at learning, compared to students with a European background (tendency means, there are many Chinese who do sports and learn as well as European douchebags).
    For this reason you have to look at the associations people have with academic success, there are regions that view these intellectuals as threats to their traditions (better educated people have a tendency to topple old customs they consider stupid).

  14. “(A quick note about the outliers. The South Tyrol is a minor positive outlier; perhaps it can be explained by its Germanic background with its special discipline and technical skills culture. ”

    Yeah, I’m sure the government subsidies, tax exemptions and fiscal transfers from the central state do not play any role at all and are only a cosmetic difference. Even local economists like Thomas Benedikter admit that the region is overfinanced by the central government, but you can’t make any cut to this nonsense otherwise tyroleans would scream “Rome is turning back to fascism” on austrian televisions creating a diplomatic mess.

  15. This post connects well with Putnam’s studies of Italy and his measures of “social capital”. He found a positive correlation between social capital today and the level of democracy 1000 years ago.