Education and Military Rivalry

What makes countries engage in reforms of mass education? Motivated by historical evidence on the relation between military threats and expansions of primary education, we assemble a novel panel dataset from the last 150 years in European countries and from the postwar period in a large set of countries. We uncover three stylized facts: (i) investments in education increase following military threats, (ii) the presence of democratic institutions is negatively correlated with education investments, and (iii) education investments increase more following military threats in democracies. These patterns continue to hold when we exploit rivalries in a country's neighborhood as an alternative source of variation. We develop a theoretical model which rationalizes the three empirical findings. The model has an additional prediction about investments in physical infrastructures, which we also take to the data.