The Library Stores Knowledge. It creates the resource "Library" that is used to store Knowledge. For every 1 "point" of the Library resource you get 1000 (Ratio of 1:1000) knowledge that you can use to research more Techs.
The library points also appear to generate state culture (1 library point = 1 state culture)
Resource : 
| Appearance | Building Level | Unlocked By | Build Cost | Base Efficiency | Workers | Profession |
|---|---|---|---|---|---|---|
|
1 | Sedentism | 8 Hammers
20 Stone |
0.1 | 3 | Official (Oldpigs) |
|
3 | Pictogram writting | 5 Shovels
15 Planks 10 Stoneblocs 100 Clay |
? | 2 | Official |
|
4 | Phonetic writting | 5 Saws
10 Stoneblocs 15 Planks 100 Paper |
2 | 2 | Official |