Abstract: Did Germany’s industrial rise begin with its water mills? This study examines how water mills shaped early industrial development in Prussia using historical county-level census data. I show that water-powered proto-industrialization fostered skilled artisanal human capital by the mid-nineteenth century. Unlike wind or animal-powered mills, water mills supported diverse industries, driving technological spillovers and early industrialization. Counties with more water mills saw faster population growth, though this effect declined with the adoption of coal and steam. These findings underscore water power’s role in Germany’s industrial rise, suggesting that the link between water power and industrial skills was not unique to Britain but likely a broader feature of European development.
Keywords: Economic history, water mills, industrial development, human capital
JEL Classification: N13, N33, N73, O13, O14
Cite this paper: Malte Hinrichs, Water mills and human capital accumulation in industrializing Prussia, Explorations in Economic History, Volume 101, 2026, 101767, ISSN 0014-4983 https://doi.org/10.1016/j.eeh.2026.101767
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