Italy was unified in 1861. As part of the process of nation-building, a free and mandatory national primary school system was established. While the new school system greatly contributed to the modernization of the country, its initial design did not reduce considerably regional disparities in human capital, with Southern regions lagging behind. The paper studies the effect of the heterogeneous territorial diffusion of literacy during the postunification period (1871-1911) on economic and social outcomes of Italian provinces 100 years later. We exploit the exogenous variations in the territorial spread in literacy rates arising from the gradual building and expansion of the railway network across provinces. We find evidence that provinces with a higher territorial diffusion of primary education in the post-unification period have today higher income per capita, less unemployment, and greater educational attainment. The evidence in terms of social capital outcomes is instead mixed, depending on the indicator considered.
 

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