july 4-7, 2017 strasbourg, france - cliometric...

8thWorldCongressofCliometrics

July4-7,2017

Strasbourg,France

Information,Schedule,andAbstracts

Registertoattendat:http://www.cliometrie.org/en/conferences/wo

rld-congress-of-cliometrics

The 8th World Congress of Cliometrics Organization, Program and Administration

Congress Organizers

Claude Diebolt, CNRS and University of Strasbourg

Michael Haupert, University of Wisconsin, La Crosse

Sumner La Croix, University of Hawaii

Carolyn Moehling, Rutgers University

Program Committee


Christopher Hanes, Binghamton University

Chulhee Lee, Seoul National University

Carolyn Moehling, Rutgers University

Cormac Ó Gráda, University College Dublin

Tirthankar Roy, London School of Economics

Susan Wolcott, Binghamton University

Local Arrangements Committee

Géraldine Del Fabbro, University of Strasbourg


Ralph Hippe, European Commission, Joint Research Centre

Magali Jaoul-Grammare, CNRS and University of Strasbourg

Charlotte Le Chapelain, University Lyon III

Tapas Mishra, Southampton University

Marion Oswald, University of Strasbourg

Faustine Perrin, Lund University

Financial Support for Graduate Students Provided by: The National Science Foundation Grant Number SES 1061697

NSF Grant Principal Investigators: Sumner La Croix and Carolyn Moehling Conference Administrator and Book Editor: Montinee (Mint) Chaksirinont Financial Administrator: Kai Zhou Local Arrangements Administrator: Marion Oswald EH.NET Support: Lana Sooter

CONGRESS PAPER TITLES

Tuesday July 4: 9:40-10:25 Backtesting Systemic Risk Measures during Historical Bank Runs Linguistic Barriers to State Capacity and Ideology: Evidence from the Cultural Revolution The Not-So-Hot Melting Pot: The Persistence of Outcomes for Descendants of the Age of Mass Migration More than One-Hundred Years of Improvements in Living Standards: The Case of Colombia

Tuesday July 4: 11:00-11:45 International Well-being Inequality in the Long Run The Reichsbank, central banking competition and monetary stability in Germany in 1876-1890 The Purchase of British Army Commissions: Signaling in a Dynamic Model of Appointment and Promotion Long-Run Consequences of Exposure to Influenza at Birth: Zurich 1889/1890

Tuesday July 4: 11:50-12:35

Colonial Virginia's Paper Money Regime, 1755-1774: Value Decomposition and Performance Unreal Wages? Real Income and Economic Growth in England, 1260-1850 From National Welfare State to Multicultural Market Economy: The Case of Denmark 1870-2011 The Geographical Origins of Early State Formation


The People, not the Place: The Decline of the North of England 1918-2017: A Surname Investigation Identifying Historical Shocks to the Marriage Decisions: The age at marriage of the Koreans from the late 11th to early 20th century The Hand of the Past and the Railway Networks of the Present The contribution of infrastructure investment to Britain’s urban mortality decline, 1861-1900


Currency Regimes and the Carry Trade Technical Change and Human Capital Investment: Evidence from the Industrial Revolution The History of Violence over the Past Two Millennia: Archaeological Bone Traumata as a Source for European Violence History Taking off and slowing down like China

Tuesday July 4: 16:05-16:50 Australian Squatters, Convicts, and Capitalists: Dividing Up a Fast-Growing Frontier Pie, 1821-1871 The Effect of Immigration Quotas on Wages, the Great Black Migration, and Industry Development Social Mobility in the Long Run – Evidence from the City of Zurich Why 1990 international Geary-Khamis dollars cannot be a foundation for reliable long run comparisons of GDP


Danger to the Old Lady of Threadneedle Street? The Bank Restriction Act and the Regime Shift to Paper Money, 1797-1821 Collectivization of Soviet agriculture and the 1932–1933 famine. Breaking from Colonial Institutions: Haiti's Idle Land, 1928-1950 Officer Retention and Military Spending – The Rise of the Military Industrial Complex during the Second World War

Wednesday July 5: 9:00-9:45

The Dawes Bonds: Selective Default and International Trade The Marginal Child throughout the Life Cycle: Evidence from Early Law Variation Unions and the Great Compression of American Inequality, 1940-1960 What Did Civil Examination Do for Korea?


Escaping Europe: Health and Human Capital of Holocaust Refugees The Evolution of Bank Lending Behavior in Post-WWII Britain: Evidence from a New Narrative Measure Prices and Informed Trading The Impact of Institutions on Innovation


Uncertainty and Hyperinflation: European Inflation Dynamics after World War I The Mortality Effects of Local Boards of Health in England, 1848-70 Rainfall Patterns and Human Settlement in Tropical Africa and Asia Compared: Did African Farmers Face Greater Insecurity? Gender Wage Inequality in Western Europe, 1400-1800


Foreclosed Real Estate and the Supply of Mortgage Credit by Building and Loans during the 1930s Gender Differences in Absenteeism in Nineteenth-Century US Manufacturing Atmospheric Pollution and Child Health in Late Nineteenth Century Britain The Road Home: The role of ethnicity in Soviet and post-Soviet migration

Wednesday July 5: 14:05-14:50 Estimating the Impact of Local Conditions on Asset Preferences in Adulthood Threat of Revolution, Peasant Movement and Redistribution: The Colombian Case Casualties of the Cold War: Fallout, Irradiated Dairy, and the Mortality Effects of Nuclear Testing “Now She Is Martha, then She Is Mary”: The Influence of Beguinages on Attitudes Toward Women

Wednesday July 5: 14:55-15:40 The Gold Pool (1961-1968) and the fall of the Bretton Woods system: Lessons for central bank cooperation A Gift of Health: The Duke Endowment’s Impact on Health Care in the Carolinas: 1925-1940 Rents and Welfare in the Second Industrial Revolution: Evidence from New York City Risk mitigation and selection under forward contracts: 19th-century Indian indentureship

Wednesday July 5: 16:05-16:50 Monetary Policy and Counterparty Risk Management at Banque de France in late 19th Century Was there a marriage premium in late nineteenth-century manufacturing? Evidence from Sweden The Old Men in the Census: Inequality and Mobility in 18th Century Murcia An Updated Global Dataset on Education Quality (1965-2015)


Plenary Session: Globalization and the New World Order

Moderator: Carolyn Moehling, Rutgers University

Panel Participants

Jeffrey Williamson, Harvard University and University of Wisconsin, Madison Kevin Hjortshøj O’Rourke, Oxford University Gregory Clark, University of California-Davis

Thursday July 6: 9:00-9:45

Industrialization as a Deskilling Process? Steam Engines and Human Capital in XIXth

Century France Loving Day: Interracial Marriages and Intergenerational Mobility in the United States The Great Moderation of Grain Price Volatility: Market Integration vs. Climate Change, Germany, 1650-1790 Monetary and Fiscal Policy in England during the French Wars (1793-1821)

Thursday July 6: 9:50-10:35 An Economic Conversion? Rural Cooperative Banking in the Netherlands at the Turn of the Twentieth Century The origins of the Italian regional divide: Evidence from real wages, 1861-1913 Long run changes in the body mass index of adults in three food abundant settler societies: Australia, Canada and New Zealand Disease and child growth in industrialising Japan: Assessing instantaneous changes in growth and changes in the growth pattern, 1911-1939

Thursday July 6: 11:00-11:45 The impact of commuting and mass transport on the London labour market: Evidence from the New Survey of London Life and Labour Economic shocks and crime in 19th-century Sweden A City of Trades and Networks: Spanish and Italian Immigrants in Late Nineteenth Century Buenos Aires, Argentina Greece in a Monetary Union: Lessons from 100 Years of Exchange-Rate Experience

Thursday July 6: 11:50-12:35 When Britain turned inward: Protection and the shift towards Empire in interwar Britain Government-made bank distress: industrialization policies and the 1899-1902 Russian financial crisis 500 Years of Urban Rents, Housing Quality and Affordability in Europe Technological choice and urban agglomeration: Steam vs water power in French industrialisation

Friday July 7: 9:00-9:45 Banking Networks and Financial Market Integration: A Case of Japan during the Late 19th Century A Land ‘of Milk and Butter’: The Role of Elites for the Economic Development of Denmark Commercial Expansion and Churning: Business Organization in Egypt between 1911 and 1948

Friday July 7: 9:50-10:35

Refinancing short-term debt with a fixed monthly interest rate into funded juros under Philip II: an asiento with the Maluenda brothers News Media and Stock Market Returns over the Long Run Towards A Quantitative Assessment of the Transformation of Workforce in the Course of China’s Industrialization and Urbanization, 1912-2012 Church building and the economy during Europe’s ‘Age of the Cathedrals’, 700–1500

Friday July 7: 11:00-11:45

Active versus Speculative Monitoring: Evidence from pre-WWI Paris-Listed Firms Trade Agreements, Democracy and Political Alliances: Understanding the evolution of the global institutional system during the First Globalization Productivity growth in Meiji Japan: the structural and regional dynamics The Volatility of Money: The New York Call Money Market and Monetary Policy Regime Change

Friday July 7: 11:50-12:35

Asset Pricing in Old Regime France Long run trails of global poverty, 1925-2010 Railroads, Technology Adoption, and Modern Economic Development: Evidence from Japan Of Mice and Merchants: Trade and Growth in the Iron Age

GENERAL INFORMATION ABOUT THE 8TH WORLD CONGRESS OF CLIOMETRICS

Congress Website

Information about accommodations, directions to the Strasbourg Convention Center, the full program for the Congress, and special events can be found at the Congress website:

http://www.cliometrie.org/en/conferences/world-congress-of-cliometrics

Congress Venue

All Congress sessions and the Congress plenary session will be held at the Strasbourg Convention Center/Palais de la Musique et des Congrès

Place de Bordeaux, 67082 Strasbourg, France. Looking for directions on how to get to the Convention Center or where to park at the Center? Please go to:

http://www.strasbourg-events.com/en/useful-information/finding-us-and-parking

There is free wifi at the Convention Center for Congress participants. Log-in and password will be distributed at the July 4 orientation session.

Congress Dates

Welcome coffee and registration open at 8 am on Tuesday, 4 July 2017, in Marie Curie B at the Convention Center. The Congress orientation session is at 9 am, with the first paper session starting at 9:40 am. The final paper session of the Congress will conclude on Friday, 7 July 2017 a little after 12:35 pm. You must be registered to attend paper sessions and the Congress plenary. At the Congress, we will provide you with a name badge which is to be worn at all times during the Congress and to all official Congress events.

Language

The official language of the Congress is English.

Climate

July in Strasbourg is generally hot and sunny. Temperatures range between 20°C (68°F) to 30°C (86°F).

Distribution of Congress Program and Papers.

We will file-drop (to the email address you provided to us) the Congress program and all papers to be discussed at the Congress. The Congress program – but not the papers -- will also be on-line at:

http://www.cliometrie.org/en/conferences/world-congress-of-cliometrics

On-line posting or other distribution of Congress papers is strictly prohibited.

Policy Regarding Laptops, Tablets and Cell Phones at Congress Sessions

We allow participants to bring tablets, laptops or printed papers to the Congress sessions. We ask that you pledge to use your tablet or laptop during paper sessions for ONE AND ONLY ONE purpose: To reference the papers discussed at the sessions. We ask that participants NEVER connect with the internet or use their cell phones during conference sessions. This means that the Congress booklet has been downloaded to your laptop or tablet. Free wifi is available at the Convention Center before and after the sessions.

Tuesday, July 4th: Reception at the Palais Universitaire from 7:00 to 9:00 PM

Address: 9 place de l'Université, 67000 Strasbourg

For more information on the Palais Universitaire: http://130anspalaisu.unistra.fr/index.php?id=21181.

And for a video tour, go to https://www.youtube.com/watch?v=YuPWPbfoUU8&spfreload=10.

Thursday, July 6th: Social Activity: Boat Tour from 5:30 to 6:45 pm Meeting Point: 5:00 pm at Quay Palais Rohan Address: Quay Palais Rohan Place du Marché aux Poissons 67000 STRASBOURG https://www.google.fr/maps/dir/Place+du+March%C3%A9+aux+Poissons,+67000+Strasbourg//@48.5804283,7.7515061,247m/data=!3m1!1e3!4m8!4m7!1m5!1m1!1s0x4796c8536eb16c91:0x7b84688ecd1dddd3!2m2!1d7.7516665!2d48.580396!1m0

For further information about the boat trip, please go to http://www.batorama.com/

Thursday, July 6th: World Congress Dinner at Maison Kammerzell from 7:00 -10:00 pm Address: 16, place de la Cathédrale, 67000 Strasbourg

For further information about the restaurant for the conference dinner, please go to http://www.maison-kammerzell.com/en/.

Transportation from Airport/Central Train Station to Congress Venue

Travelling to Strasbourg:

http://www.strasbourg-events.com/en/why-strasbourg/travelling-strasbourg

By Train:

From the Central Train Station (Gare Centrale): take tram C (direction Neuhof, Rodolphe Reuss), change at République and take tram B (direction Hoenheim Gare) or E (direction Robertsau Boecklin), stop at station Wacken. You can also take a taxi, for instance the company “taxi 13”, phone: + 33 (0)3 88 36 13 13 (http://www.taxi13.fr). For more details: https://www.cts-strasbourg.eu/en/

By plane:

From Paris Charles De Gaulle Airport, Basel-Mulhouse Airport or Frankfurt International Airport with correspondence by train or bus to Strasbourg.

From Karlsruhe Baden Airpark: take bus line 205 to Baden-Baden train station and take train to Strasbourg Gare Centrale. Shuttles are also available from Baden-Baden Airpark to Strasbourg - Place Austerlitz.

From Strasbourg-Entzheim Airport: take the train from the airport to the Central Train Station (Gare Centrale).

Visas

Participants from certain countries may require a visa in order to travel to France. It is the responsibility of the participant to obtain a visa if necessary.

Liability and Insurance

The Congress secretariat and organizers cannot accept any liability for personal accidents or loss of or damage to private property of participants of the 8th World Congress of Cliometrics.

Dress Code

Business casual for all occasions.

Questions about Strasbourg and local arrangements for the Congress?

Please contact Ms. Marion Oswald Phone: + 33 (0)3 68 85 49 40 Fax: + 33 (0)3 68 85 49 41 Email: [email protected]

Questions about the program for the Congress?

Please contact Sumner La Croix at [email protected] or [email protected].

RULES OF ENGAGEMENT

The Cliometrics Congress seeks to promote scholarly discussion of research in progress. We have 87 sessions in which particular papers in progress are discussed. We send all of the papers out to Congress participants to be read in advance of the sessions. The paper presenter at each session has only five minutes to make an opening statement, and then the floor is opened for 40 minutes of discussion. We allow participants to bring tablets, laptops or printed papers to the Congress sessions. We ask that you pledge to use your tablet or laptop during paper sessions for one and only one purpose: To reference the papers discussed at the sessions. We ask that participants NEVER connect with the internet or use their cell phones during conference sessions. This means that the Congress booklet has been downloaded to your laptop or tablet. Free wifi is available at the Convention Center before and after the sessions.

Paper presenters

Paper presenters have five minutes to make an opening statement and the floor is then opened for discussion. The most effective strategy has been to identify the key issue the paper addresses, and perhaps raise a couple of interesting questions that might be worth addressing and quickly state the leading conclusions drawn from the study. If you wish, you may bring handouts. Absolutely no powerpoint slides. Here are some strategies that have not worked so well. Some have tried to jam a complete summary of the paper into a 5-minute period. Usually the speaker speaks so quickly that the more hard-of-hearing members of the audience hear every fifth word, which certainly lends a surreal feeling to the presentation. In one case of speed talking, several participants still swear that they heard the Book of Revelations. Other presenters have tried to guide the discussion by laying out the list of issues that they would like to discuss and those that were not worth discussing. The participants generally completely ignored the presenter’s suggested organization of the discussion. Finally, others have tried to ignore the 5-minute time limit. These miscreants were summarily chastised by the chair and the participants. Chairs

The Chair introduces the paper presenter(s) and the session, and monitors the discussion and ensures presenters answer the question in a timely manner. The Chair has three vital functions. First, the paper presenter has only five minutes to make their initial presentation. If the presenter goes over the five minute mark, you must cut them off and open the floor for discussion.

Second, you are in charge of determining who gets to speak when. The tradition is to have people signal their interest in talking by raising their hand. In some cases, people have turned their name placards so that they are standing on their side. Keep a list and try to acknowledge to the participants that they are on the list. Expect to see people signaling to speak as early as the opening of the presentation. Occasionally during the session, you might want to read out the next few names so people have a sense of where they sit in the queue.

Third, don’t let people make a laundry list of points when it is their turn to speak. Confine them to one point or issue and maybe a follow-up question. If they wish to say more, politely let them know that they have the opportunity to make their next point after the other participants who are now in the queue, and that you have put their name at the end of the queue.

If you run out of names in the queue, go ahead and start asking questions or raising issues yourself until more people start volunteering to speak up.

Participants

Participants who are interested in contributing to the discussion should signal to the chair that they would like to speak. Veteran attendees have been known to do this as soon as the session begins. The chair keeps a list and calls on people as their turn comes up. You will probably have several things to say about a paper, but you should focus only on one when it is your turn to speak. When your turn arrives, pick the issue you believe to be most important and raise that issue or question. If you have more issues that you would like to raise, after you finish speaking, you should signal to the chair that you would like another chance to speak and she will place you at the end of the list. Remember that you have at least 40 other colleagues with expertise here at the conference and there are only 55 minutes for discussion of each paper. Leave your colleagues some room to make their points. If some of what you have to say does not come up in the open discussion, we encourage you to speak to the paper presenters individually.

If you have a point to be made that is specific to the current issue under discussion, you can signal to the chair your interest in making this point. Usually, it is effective to signal with the name placard. In that case if you are in the queue, you should expect that you will be moved to the end of the exiting queue, should you want to make another point.

Tuesday 4 July 2017 World Congress Schedule Welcome Coffee and Registration 8:00 – 9:00 am Congress Orientation in Marie Curie B 9:00 – 9:30 am

§ Marie Curie B Chair: Farley Grubb 9:40 – 10:25 am Christian Brownlees, Ben Chabot, Eric Ghysels, and Christopher Kurz Backtesting Systemic Risk Measures during Historical Bank Runs

§ Salon Dresde Chair: Susan Wolcott Susan Ou and Heyu Xiong Linguistic Barriers to State Capacity and Ideology: Evidence from the Cultural Revolution

§ Salon Ramat Gan Chair: Vincent Bignon Zachary Ward The Not-So-Hot Melting Pot: The Persistence of Outcomes for Descendants of the Age of Mass Migration

§ Salon Leicester Chair: Les Oxley Juliana Jaramillo-Echeverri, Adolfo Meisel-Roca, and María Teresa Ramírez-Giraldo

More than One-Hundred Years of Improvements in Living Standards: The Case of Colombia

Coffee/Tea Break 10:25 – 11:00 am

§ Marie Curie B Chair: Jan Luiten van Zanden 11:00 - 11:45 am Leandro Prados de la Escosura

International Well-being Inequality in the Long Run

§ Salon Dresde Chair: Carolyn Moehling Ousmène Jacques Mandeng The Reichsbank, central banking competition and monetary stability in Germany in 1876-90

§ Salon Ramat Gan Chair: Paul Sharp

Esther Redmount, Arthur Snow, and Ronald S. Warren, Jr. The Purchase of British Army Commissions: Signaling in a Dynamic Model of Appointment and Promotion

§ Salon Leicester Chair: David Chambers Joël Floris, Sonja Glaab-Seucken, and Ulrich Woitek Long-Run Consequences of Exposure to Influenza at Birth: Zurich 1889/1890

§ Marie Curie B Chair: Stephan Ernst Maurer 11:50 am - 12:35 pm

Farley Grubb Colonial Virginia's Paper Money Regime, 1755-1774: Value Decomposition and Performance

§ Salon Dresde Chair: Bin Xie Jane Humphries and Jacob Weisdorf Unreal Wages? Real Income and Economic Growth in England, 1260-1850

§ Salon Ramat Gan Chair: Alexandra de Pleijt Niels Kærgaard From National Welfare State to Multicultural Market Economy: The Case of Denmark

1870-2011

§ Salon Leicester Chair: Matthijs Korevaar Luisito Bertinelli and Anastasia Litina The Geographical Origins of Early State Formation

Lunch 12:35 – 14:05 pm

§ Marie Curie B Chair: Sumner La Croix 14:05 - 14:50 pm Gregory Clark The People, not the Place. The Decline of the North of England 1918-2017: A Surname Investigation.

§ Salon Dresde Chair: Kostadis Papaioannou

Sun Go and Heejin Park Identifying Historical Shocks to the Marriage Decisions: The age at marriage of the

Koreans from the late 11th to early 20th century

§ Salon Ramat Gan Chair: Michelangelo Vasta Douglas J. Puffert The Hand of the Past and the Railway Networks of the Present

§ Salon Leicester Chair: Hakon Albers

Jonathan Chapman The contribution of infrastructure investment to Britain’s urban mortality decline, 1861-1900

§ Marie Curie B Chair: Pamfili Antipa 14:55 – 15:40 pm

Olivier Accominotti, Jason Cen, David Chambers, and Ian Marsh Currency Regimes and the Carry Trade

§ Salon Dresde Chair: Alessandro Nuvolari Alexandra M. de Pleijt, Chris Minns, and Patrick Wallis

Technical Change and Human Capital Investment: Evidence from the Industrial Revolution

§ Salon Ramat Gan Chair: Liam Brunt

Jörg Baten and Richard H. Steckel The History of Violence over the Past Two Millennia: Archaeological Bone Traumata as a Source for European Violence History

§ Salon Leicester Chair: Ousmène Jacques Mandeng

Eric Girardin and Harry X. Wu Taking off and slowing down like China Coffee/Tea Break 15:40 – 16:05 pm

§ Marie Curie B Chair: Leandro Prados de la Escosura 16:05 - 16:50 pm Laura Panza and Jeffrey G. Williamson Australian Squatters, Convicts, and Capitalists: Dividing Up a Fast-Growing Frontier Pie 1821-1871

§ Salon Dresde Chair: Sun Go

Bin Xie The Effect of Immigration Quotas on Wages, the Great Black Migration, and Industry Development

§ Salon Ramat Gan Chair: Michael Haupert

Giacomin Favre, Joël Floris, and Ulrich Woitek Social Mobility in the Long Run – Evidence from the City of Zurich

§ Salon Leicester Chair: Benjamin Chabot

Liam Brunt and Antonio Fidalgo Why 1990 international Geary-Khamis dollars cannot be a foundation for reliable long run comparisons of GDP

§ Marie Curie B Chair: Ulrich Woitek 16:55 - 17:40 pm Patrick K. O’Brien and Nuno Palma Danger to the Old Lady of Threadneedle Street? The Bank Restriction Act and the Regime Shift to Paper Money, 1797-1821

§ Salon Dresde Chair: William Collins

Natalya Naumenko Collectivization of Soviet agriculture and the 1932–1933 famine.

§ Salon Ramat Gan Chair: Èric Roca Fernández

Craig Palsson Breaking from Colonial Institutions: Haiti's Idle Land, 1928-1950

§ Salon Leicester Chair: Cihan Artunç Ahmed Rahman Officer Retention and Military Spending – The Rise of the Military Industrial Complex during the Second World War

Tuesday, July 4th: Reception at the Palais Universitaire from 19:00 to 21:00 PM Address: 9 place de l'Université, 67000 Strasbourg

For more information on the Palais Universitaire: http://130anspalaisu.unistra.fr/index.php?id=21181.

And for a video tour, go to https://www.youtube.com/watch?v=YuPWPbfoUU8&spfreload=10.

Wednesday 5 July 2017 World Congress Schedule

§ Marie Curie B Chair: Kris James Mitchener 9:00 - 9:45 am Olivier Accominotti, Philipp Kessler, and Kim Oosterlinck The Dawes Bonds: Selective Default and International Trade

§ Salon Dresde Chair: Maxime Wavasseur Joanna N. Lahey, Marianne H. Wanamaker, and Elizabeth Oltmans Ananat The Marginal Child throughout the Life Cycle: Evidence from Early Law Variation

§ Salon Ramat Gan Chair: Rowena Gray

William J. Collins and Gregory T. Niemesh Unions and the Great Compression of American Inequality, 1940-1960

§ Salon Leicester Chair: Erin McGuire

Myung Soo Cha, Junseok Hwang, and Heejin Park What Did Civil Examination Do for Korea?

§ Marie Curie B Chair: Thor Berger 9:50 - 10:35 am Matthias Blum and Claudia Rei Escaping Europe: Health and Human Capital of Holocaust Refugees

§ Salon Dresde Chair: Alain Naef

Oliver Bush The Evolution of Bank Lending Behavior in Post-WWII Britain: Evidence from a New Narrative Measure

§ Salon Ramat Gan Chair: Maria del Pilar Lopez-Uribe

Graeme G. Acheson, Christopher Coyle, David Jordan, and John D. Turner Prices and Informed Trading

§ Salon Leicester Chair: Sebastian Fleitas

Alexander Donges, Jean-Marie A. Meier, Rui C. Silva The Impact of Institutions on Innovation

Coffee/Tea Break 10:35 – 11:00 am

§ Marie Curie B Chair: Ahmed Rahman 11:00 - 11:45 am Jose A. Lopez and Kris James Mitchener Uncertainty and Hyperinflation: European Inflation Dynamics after World War I

§ Salon Dresde Chair: Heyu Xiong

Maxwell Kiniria The Mortality Effects of Local Boards of Health in England, 1848-70

§ Salon Ramat Gan Chair: Alexander Persaud

Kostadis Papaioannou and Ewout Frankema Rainfall Patterns and Human Settlement in Tropical Africa and Asia Compared. Did African Farmers Face Greater Insecurity?

§ Salon Leicester Chair: Giovanni Federico

Alexandra M. de Pleijt and Jan Luiten van Zanden Gender Wage Inequality in Western Europe, 1400-1800

§ Marie Curie B Chair: Myung Soo Cha 11:50 am - 12:35 pm Price Fishback, Sebastian Fleitas, Jonathan Rose, and Ken Snowden

Foreclosed Real Estate and the Supply of Mortgage Credit by Building and Loans during the 1930s

§ Salon Dresde Chair: Junichi Yamasaki

Joyce Burnette Gender Differences in Absenteeism in Nineteenth-Century US Manufacturing

§ Salon Ramat Gan Chair: Emilie Bonhoure

Roy E. Bailey, Timothy J. Hatton, and Kris Inwood Atmospheric Pollution and Child Health in Late Nineteenth Century Britain

§ Salon Leicester Chair: Adolfo Meisel-Roca

Young-ook Jang The Road Home: the role of ethnicity in Soviet and post-Soviet migration

Lunch 12:35 – 14:05 pm

§ Marie Curie B Chair: Masato Shizume 14:05 - 14:50 pm

Erin McGuire Estimating the Impact of Local Conditions on Asset Preferences in Adulthood

§ Salon Dresde Chair: Caroline Fohlin

Maria del Pilar Lopez-Uribe Threat of Revolution, Peasant Movement and Redistribution: The Colombian Case

§ Salon Ramat Gan Chair: Montinee Chaksirinont

Keith Meyers Casualties of the Cold War: Fallout, Irradiated Dairy, and the Mortality Effects of Nuclear Testing

§ Salon Leicester Chair: Franz Zobl

Annalisa Frigo and Èric Roca Fernández “Now She Is Martha, then She Is Mary”: The Influence of Beguinages on Attitudes Toward Women

§ Marie Curie B Chair: Chris Minns 14:55 - 15:40 pm Michael Bordo, Eric Monnet, and Alain Naef The Gold Pool (1961-1968) and the fall of the Bretton Woods system. Lessons for central bank cooperation

§ Salon Dresde Chair: Jacob Weisdorf Alex Hollingsworth and Melissa A. Thomasson A Gift of Health: The Duke Endowment’s Impact on Health Care in the Carolinas: 1925-1940

§ Salon Ramat Gan Chair: Nadir Altinok

Rowena Gray Rents and Welfare in the Second Industrial Revolution: Evidence from New York City

§ Salon Leicester Chair: Tim Luger

Alexander Persaud Risk mitigation and selection under forward contracts: 19th-century Indian indentureship

Coffee/Tea Break 15:40 - 16:05 pm

§ Marie Curie B Chair: Timothy Hatton 16:05 - 16:50 pm Maylis Avaro and Vincent Bignon Monetary Policy and Counterparty Risk Management at Banque de France in late 19th Century

§ Salon Dresde Chair: Anastasia Litina

Maria Stanfors Was there a marriage premium in late nineteenth-century manufacturing? Evidence from

Sweden

§ Salon Ramat Gan Chair: Jörg Baten Jose-Antonio Espin-Sanchez, Salvador Gil-Guirado, and Chris Vickers

The Old Men in the Census: Inequality and Mobility in 18th Century Murcia

§ Salon Leicester Chair: Eric Schneider Nadir Altinok, Noam Angrist, Harry Patrinos An Updated Global Dataset on Education Quality (1965-2015)

Plenary Session: Globalization and the New World Order

§ Marie Curie B 17:00 - 18:00 pm

Moderator: Carolyn Moehling, Rutgers University

Panelists:

Jeffrey Williamson Harvard University and University of Wisconsin, Madison

Kevin O’Rourke Oxford University

Gregory Clark University of California, Davis

Panelist Bios

Jeffrey Williamson is the Laird Professor of Economics, emeritus, Harvard University and Honorary Fellow in the Department of Economics at the University of Wisconsin, Madison. He is past president of the Economic History Association and a Fellow of the Cliometric Society. Over his illustrious career, Professor Williamson has written many books and articles on globalization and its consequences. Professor Williamson is currently working on several research projects examining long run trends in factor prices, economic growth, inequality, and living standards around the world.

Kevin O’Rourke is Chichele Professor of Economic History and Fellow, All Souls College, University of Oxford. He has served as Trustee of the Cliometric Society and Vice President of the Economic History Association. Professor O’Rourke works at the intersection of economic history and international economics and has written extensively on the history of globalization and deglobalization. His book, Globalization and History, co-authored with fellow panelist, Jeffrey Williamson, won the 1999 American Association of Publishers/PSP Award for the best scholarly book in economics. Professor O’Rourke’s current research focuses on interwar trade and trade policy and the relationships between trade and war.

Jeffrey G. Williamson

Kevin Hjortshøj O’Rourke

Gregory Clark is Professor of Economics at University of California, Davis. He served as Editor of the European Review of Economic History from 2011 to 2015. Professor Clark is a renowned scholar of the Industrial Revolution. His most recent book, The Son Also Rises: Surnames and the History of Social Mobility (with Neil Cummins, Yu Hao, Daniel Diaz Vidal, et al.) won the Gyorgy Ranki Prize from the Economic History Association in 2015 and was one of Vox’s "Best Books We Read in 2014.” Professor Clark’s current research explores social mobility and inequality in England from 1170 to the present.

Wednesday evening: no Congress events scheduled.

Enjoy Strasbourg!

Gregory Clark

Thursday 6 July 2017 World Congress Schedule

§ Marie Curie B Chair: Blanca Sánchez-Alonso 9:00 - 9:45 am Claude Diebolt, Charlotte Le Chapelain, and Audrey-Rose Menard Industrialization as a Deskilling Process? Steam Engines and Human Capital in XIXth

Century France

§ Salon Dresde Chair: Melissa Thomasson Jacky S. Charles Loving Day: Interracial Marriages and Intergenerational Mobility in the United States

§ Salon Ramat Gan Chair: Montinee Chaksirinont

Hakon Albers, Ulrich Pfister, and Martin Uebele The Great Moderation of Grain Price Volatility: Market Integration vs. Climate Change, Germany, 1650-1790

§ Salon Leicester Chair: Matthias Morys

Pamfili Antipa and Christophe Chamley Monetary and Fiscal Policy in England during the French Wars (1793-1821)

§ Marie Curie B Chair: Michael Haupert 9:50 - 10:35 am Christopher L. Colvin, Stuart Henderson, and John D. Turner An Economic Conversion? Rural Cooperative Banking in the Netherlands at the Turn of the Twentieth Century

§ Salon Dresde Chair: Lee Alston

Giovanni Federico, Alessandro Nuvolari, and Michelangelo Vasta The origins of the Italian regional divide: evidence from real wages, 1861-1913

§ Salon Ramat Gan Chair: Jean-Pascal Bassino John Cranfield, Kris Inwood, Les Oxley, and Evan Roberts Long run changes in the body mass index of adults in three food abundant settler societies: Australia, Canada and New Zealand

§ Salon Leicester Chair: Jacky Charles

Eric B. Schneider and Kota Ogasawara Disease and child growth in industrialising Japan: Assessing instantaneous changes in growth and changes in the growth pattern, 1911-39

Coffee/Tea Break 10:35 - 11:00 am

§ Marie Curie B Chair: Joyce Burnett 11:00 - 11:45 am Jessica Bean, Andrew Seltzer, and Jonathan Wadsworth The impact of commuting and mass transport on the London labour market: Evidence from the New Survey of London Life and Labour

§ Salon Dresde Chair: Jonathan Fox

Thor Berger Economic shocks and crime in 19th-century Sweden

§ Salon Ramat Gan Chair: Nuno Palma

Leticia Arroyo Abad and Blanca Sánchez-Alonso A City of Trades and Networks. Spanish and Italian Immigrants in Late Nineteenth

Century Buenos Aires, Argentina

§ Salon Leicester Chair: Eric Girardin Matthias Morys Greece in a Monetary Union: Lessons from 100 Years of Exchange-Rate Experience

§ Marie Curie B Chair: Sumner La Croix 11:50 am - 12:35 pm Alan de Bromhead, Alan Fernihough, Markus Lampe, and Kevin Hjortshøj O’Rourke When Britain turned inward: Protection and the shift towards Empire in interwar Britain

§ Salon Dresde Chair: Alexander Donges

Nikita Lychakov Government-made bank distress: industrialization policies and the 1899-1902 Russian financial crisis

§ Salon Ramat Gan Chair: Zachary Ward

Piet Eichholtz, Matthijs Korevaar, and Thies Lindental 500 Years of Urban Rents, Housing Quality and Affordability in Europe

§ Salon Leicester Chair: Craig Palsson

Franz Xaver Zobl Technological choice and urban agglomeration: Steam vs water power in French industrialisation

There are no sessions on Thursday afternoon – Enjoy Strasbourg!

Thursday, July 6th: Social Activity: Boat Tour from 17:30 to 18:45 pm Meeting Point: 17:00 pm at Quay Palais Rohan Address: Quay Palais Rohan Place du Marché aux Poissons 67000 STRASBOURG https://www.google.fr/maps/dir/Place+du+March%C3%A9+aux+Poissons,+67000+Strasbourg//@48.5804283,7.7515061,247m/data=!3m1!1e3!4m8!4m7!1m5!1m1!1s0x4796c8536eb16c91:0x7b84688ecd1dddd3!2m2!1d7.7516665!2d48.580396!1m0

Thursday, July 6th: World Congress Dinner at Maison Kammerzell from 19:00 -22:00 PM Address: 16, place de la Cathédrale, 67000 Strasbourg

For further information about the restaurant for the conference dinner, please go to http://www.maison-kammerzell.com/en/.

Friday 7 July 2017 World Congress Schedule

§ Marie Curie B Chair: Keith Meyers 9:00 - 9:45 am Masato Shizume Banking Networks and Financial Market Integration: A Case of Japan during the Late 19th Century

§ Salon Dresde Chair: Andrew Seltzer

Peter Sandholt Jensen, Markus Lampe, Paul Sharp, and Christian Skovsgaard A Land ‘of Milk and Butter’: The Role of Elites for the Economic Development of

Denmark

§ Salon Leicester Chair: Douglas Puffert Cihan Artunç Commercial Expansion and Churning: Business Organization in Egypt between 1911 and 1948

§ Marie Curie B Chair: Jessica Bean 9:50 - 10:35 am Carlos Alvarez-Nogal and Christophe Chamley Refinancing short-term debt with a fixed monthly interest rate into funded juros under Philip II: an asiento with the Maluenda brothers

§ Salon Dresde Chair: Florian Ploeckl

Alan Hanna, John D. Turner, Clive B. Walker News Media and Stock Market Returns over the Long Run

§ Salon Ramat Gan Chair: Junichi Yamasaki

Harry X. Wu Towards A Quantitative Assessment of the Transformation of Workforce in the Course of China’s Industrialization and Urbanization, 1912-2012

§ Salon Leicester Chair: Maria Stanfors

Eltjo Buringh, Bruce Campbell, Auke Rijpma, and Jan Luiten van Zanden Church building and the economy during Europe’s ‘Age of the Cathedrals’, 700–1500

Coffee/Tea Break 10:35 - 11:00 am

§ Marie Curie B Chair: Masato Shizume 11:00 - 11:45 am Emilie Bonhoure, Laurent Germain, David Le Bris Active versus Speculative Monitoring: Evidence from pre-WWI Paris-Listed Firms

§ Salon Dresde Chair: Susan Wolcott

Rui Pedro Esteves and Florian Ploeckl Trade Agreements, Democracy and Political Alliances: Understanding the evolution of the global institutional system during the First Globalization

§ Salon Ramat Gan Chair: Carolyn Moehling

Jean-Pascal Bassino, Kyoji Fukao, and Tokihiko Settsu Productivity growth in Meiji Japan: the structural and regional dynamics

§ Salon Leicester Chair: Charlotte Le Chapelain

Caroline Fohlin The Volatility of Money: The New York Call Money Market and Monetary Policy Regime Change

§ Marie Curie B Chair: Jonathan Chapman 11:50 am - 12:35 pm David le Bris, William Goetzmann, Sebastien Pouget, and Maxime Wavasseur Asset Pricing in Old Regime France

§ Salon Dresde Chair: Chris Colvin Michail Moatsos Long run trails of global poverty, 1925-2010

§ Salon Ramat Gan Chair: Audrey-Rose Menard

Junichi Yamasaki Railroads, Technology Adoption, and Modern Economic Development: Evidence from

Japan

§ Salon Leicester Chair: Clive Walker Stephan Ernst Maurer, Jörn-Steffen Pischke, Ferdinand Rauch Of Mice and Merchants: Trade and Growth in the Iron Age

The Congress is Closed. Bon Voyage!

Abstractsfor87PaperstobePresentedatthe

8thWorldCongressof

Cliometrics

July3-7,2017Strasbourg,France

FormoreinformationonattendingtheWorldCongress,pleasegoto:

http://www.cliometrie.org/en/conferences/world-

congress-of-cliometrics

TheGreatModerationofGrainPriceVolatility:MarketIntegrationvs.ClimateChange,Germany,1650-1790

HakonAlbers,UlrichPfister,MartinUebele

Abstract

This paper discusses the determinants of economic (i.e. population) growth in aMalthusianeconomy, especiallymarket integration and climate change, through thelens of grain prices. In particular, it analyzes Germany, the fourth most populouseconomyof18thcenturyEurope,duringtheperiod1650-1790.Thisperiodfeaturesaremarkableincreaseinthepopulationsizefrom13.5millionin1618(pre-Warlevel)to19millionin1800.ForapopulationincreaselikethisinaclosedeconomyMalthusianequilibriumeither aggregate factor inputof landor total factorproductivity (TFP) inagriculturemusthave increased.Theexplanatorypowerof increasing factor input islimitedbecauseofdiminishingreturns.ThereareseveralwayshowagriculturalTFPcouldhaveincreasedinGermanypriorto1800.Wefocusongrainmarketintegrationanddiscussitsrelevancecomparedtootherfactors such as institutional and technical changes. Market integration increasesallocative efficiency of production factors and likely the allocation of grain forconsumption.Wecompileanewdatasetofryepricesfrom15Germancitiesintheperiod1650-1790.InEurope,breadfromgrainepitomizedthemajorspendingshareinconsumerbasketsforthepre-industrialperiod,andryewasthemostimportantfoodgraininGermany.Onepossibleexplanationforconvergingpricesapartfrommarketintegrationisclimatechange;here inparticular theendof theLittle IceAge(LIA)around1700.Onecouldarguethatadeclineofweathershocksmayhavereducedlocalcropfailuresthatwouldhave been reflected in lower price volatility independent of the state of marketintegration.Toaddresstheproblemofmeasuringpriceconvergencerobusttoweathershocksandclimatechange,weformallyanalyzethecoefficientofvariation(CoV),anoftenappliedmeasuretotestthelawofoneprice(LOOP).ThemaininsightofourformalanalysisisthattheCoVisneitherrobusttoweathershocksnortoclimatechange.Wethusapplycross-sectionalstandarddeviationsinsteadoftheCoVtodeflatedfive-year-meanpricesandworkwithsub-regionsdefinedbasedonclimatologicalresearch.Our results bear out two stylized facts: (1) cross-sectional price convergence at thenationalleveland(2)adeclineofthetemporalvolatilityofanaggregatepriceseries.Ourmethodologicalapproachallowstheconclusionthatpriceconvergenceismeasuredrobusttoweathershocks.InNorth-WesternGermany,priceconvergenceisalsorobustto climate change. A major fraction of the price convergence, however, appearedbetweenNorth-WesternandSouth-EasternGermany.

Wefurtherdiscusstherelevanceofourfindingsinthecontextofgrowththeory.Thepricevolatilitymoderationcoincidedwithadecreaseinthelevelofaggregatemortality.Lower grain price volatility likely increased survival probability and possibly lifeexpectancy,bothofwhicharepartofrelevantgrowthmodels.Thus,weconsiderthedeclineoftemporalvolatilitysorelevantandnewthatwetermitTheGreatModerationofGrainPriceVolatility.

AnUpdatedGlobalDatasetonEducationQuality(1965-2015)

NadirAltinok*,NoamAngrist,HarryPatrinos(1)

Abstract

Theaimofthispaperistoproposeanewdatabaseallowingforcomparativeevaluationoftherelativeperformanceofschoolingsystemsaroundtheworldbetween1965and2015.Wemeasurethisperformancethroughpupils’achievementinstandardizedtests(PISA,TIMSS,SACMEQ,ELCE,PIRLS,PASEC).Ourresultsarequitesurprising.Therankingofthebestperformingcountriesisquitestableovertime,suggestingforlittleexpectationsaboutthepolicieswhicharefocusedontheincreaseofeducationquality.However,theperformanceofspecificcountriesprovesthatspecifictrendsarestillpossible(likeSouthAfricaorQatar).Moreover,basedonspecificthresholdsinsteadofglobalmeanscores,ourdatasetshowsthatasignificantincreasehasbeenobservedinspecificcountrieswhilethistrendisnothighlightedinstandardmeanscoreanalysis.

Refinancingshort-termdebtwithafixedmonthlyinterestrateintofundedjurosunderPhilipII:anasientowiththeMaluendabrothers

CarlosÁlvarez-NogalDepartamentofSocialScienceUniversidadCarlosIIIdeMadrid

ChristopheChamley

DepartmentofEconomicsBostonUniversity

Abstract

Inthefragmentedgeographical,fiscalandfinancialstatethatPhilipIIofSpainhadinherited,whilethepublicdebtreachedanunprecedentedlevel(50-60percentofGDP),thecriticalrefinancingofunfundedasientosintofundedjuroswasoperatedbymerchant-bankerswhosignedtheasientos.Thisprocessisillustrated,withanabundantarchivaldocumentation,byanasientowiththeMaluendabrothers,in1595,thatdeliveredtotheCrownsteadymonthlycashpaymentsforayearwith,fortwothirdsofthecredit,optionstoselljuros,andamonthlyrateofonepercentontheinterimbalance.Otherexamplesareprovided.TheMaluendacontractisatextbookcontractwithanabundantdocumentationthatconfirmstheinterpretationoftheflexibilityfortheCrown’spaymentssubjecttoafixedmonthlyrateofonepercentonthebalancedue,asinamoderncreditline.TheanalysisofthecontractanditsattachmentsdemonstratesthattheunderstandingofthefinancesofPhilipIIrequiresacarefulreadingofanumberofcontractsandoftheirattachmentsinthearchivesofSimancas.Thisisespeciallytruebecausethetermsofthepaymentsarenotdetailedinmanycontracts.Theexpertiseofthemerchant-bankersprovedtobeessentialforoneofthemostinterestingfeaturesofthecontracts,theoptiontoconvertpartoftheasientointojuros.Suchroutineconversions,delegatedtoprivateagents,tookplacewellbeforethestateconversionin18thcenturyEngland.Inaddition,thecontractsrepeatedlyacknowledgethefinancialintermediationofthemerchant-bankerswhoraisefundsinthecreditmarketsinordertofinancetheasientos.ThetextsofmanycontractsshowthattheasientostransformedfortheCrownmultipleanddispersedsourcesofrevenues,inthispre-modernstage,intoonesteadystreamofcashatspecifiedplaces.Inthistransformation,themerchant-bankers'wereexpertsinthedetailsofthepublicfinanceoftheCrownandinthemarketsforthelong-termdebt.

MonetaryandFiscalPolicyinEngland

duringtheFrenchWars(1793-1821)

PamfiliAntipa(BanquedeFranceandParisSchoolofEconomics)

ChristopheChamley(BostonUniversity)

Abstract

Howdoyoufinanceaworldwaroranycostlycrisis?Whatroleshouldthecentralbankplayin

financingpublicexpenditures?Andoncepublicdebthasaccumulatedand inflationoccurred,

howdoyouexitfromsuchasituation?WeanswerthesequestionsbystudyingtheFrenchWars

(1793-1815). As thewars exerted unprecedented pressures on Britain's budget, they offer a

uniquecasestudyoftheinteractionsbetweenfiscalandmonetarypolicies.

OuranalysisisofhistoricalinterestastheFrenchWarsusheredinPaxBritannicaandshapedthe

politicalandfinanciallandscapeforthecenturytocome.Thewarsalsoservedasablueprintfor

financingWWI.Wealsoinformthepolicychoicebetweenmaintainingafixedexchangerateand

restructuringanoutstandingdebtoverhang,asunderdiscussionincertainmembercountriesof

the euro area. Finally,we contribute to the analytical debate concernedwith the conditions

under which the variations of a central bank's balance sheet affect prices (Chamley and

Polemarchakis1984).

Throughout thewars,policymakersadjustedmonetaryand fiscalpolicies tomeet increasing

needsofwarfinance.Thismeantimplementingnecessarymonetaryandfiscalpolicyinnovations,

suchsuspendingthegoldstandardandinstitutingBritain'sfirstandverysuccessfulincometax—

60percentoftheextracost incurredbythewarswouldbecoveredbytaxrevenues(O'Brien

1988).Theseadjustmentssignaledthegovernment'scommitmenttoundertakethenecessaryto

winthewar,withoutjeopardizingfiscalsustainability.

Drawingonnewhand-collecteddata,wealsoshowthattheBankofEnglandplayedanessential

roleintwosuccessivephasesofthewarsbypurchasinglargeamountsofprivatebillsatfirst,and

thenofpublicdebt.WhiletheBank'sbalancesheetincreasedsubstantially,itscompositionmay

havematteredmorethanitsgrowth.Toresumethegoldstandard,theBankneededtorestore

a balance sheet thatwas similar to the one before the suspension. The counterpart to note

circulation being the holdings of public securities, resumption hinged on the Treasury

reimbursing the Bank. The size of the gold reserve was not elementary for maintaining or

returningtoconvertibilitywithgold;fiscalpolicywas(Sargent1982).

Reversingthewarstimuluscamewithhigheconomicandsocialcosts.Therateofunemployment

increasedfrom5to17percentinthepost-wardepression(Feinstein1998).Thecostsofresuming

the gold standard remainedunaccounted for sincepublicmanifestationsof social discontent

wererenderedillegalandtheelectoralsystementailedanunder-representationofthecitizens

mostaffected.

Themistakenlyperceivedeasewithwhichtheresumptionwasundertakenin1821shapedBritish

monetaryorthodoxyandtheglobalfinancialsystemforthecenturytofollow(Fetter,1965).It

alsousheredinthegoldstandard'ssecondresumptionafterWWI,aneventthatprolongedand

aggravatedtheGreatDepression(EichengreenandTemin2000).Thisisarelevantlessonforthe

currentpolicychoicebetweenmaintainingafixedexchangerateandrestructuringoutstanding

publicdebt,asunderdiscussionincertaineuroareacountries.

CommercialExpansionandChurning:BusinessOrganizationinEgyptbetween1911and1948

CihanArtunç

UniversityofArizona

Abstract

ThispaperexploresbusinessexpansionandcontractioninEgyptbetween1910and1949in

responsetothechangesinthemacroeconomicenvironment.Ishowthatpartnership

formationsanddissolutionswaspro-cyclicalbutpartnershipsizeandcapitalizationwere

counter-cyclical.Corporationentryandexithadnostrongassociationwiththebusinesscycle

conditionsbuttheirstartupcapitalizationwassubstantiallypro-cyclical.Idrawthreebroader

conclusions.First,mostcommercialexpansiontookplaceontheextensivemargin;boomsled

tothecreationofmorefirms,whichtypicallyhadlowercapitalizationandfewerpartners.This

isconsistentwiththetheoryofcostlyentryinthepresenceoffinancialfrictions.Expansionary

periodsloweredtheproductivitythresholdforentry,increasingthenumberofentrantby

overwhelminglyselectingonlow-productivityfirmsthatweresmallerandfrailer.Second,pro-

cyclicalchurningwasaconsequenceoffastattritionamongpartnerships,mostofwhichbroke

upwithintwoyears.Third,thedifferentdynamicsofcorporationswereconsequencesofthe

concessionarysystemofincorporation,whichrequiredspecialpermissionfromthe

government.

ProductivitygrowthinMeijiJapan:

Thestructuralandregionaldynamics

Jean-PascalBassino(IAO,ENSLyon,UniversityofLyon;[email protected])

KyojiFukao

(InstituteofEconomicResearch,HitotsubashiUniversity;[email protected])

TokihikoSettsu(DepartmentofEconomics,MusashiUniversity;[email protected])

Abstract

There is no doubt that macroeconomic conditions and living standards improved

steadily in Japan during the Meiji era (1868-1912). However, since the major

quantitativeevidencewasbasedoncountrylevelpercapitaGDPestimatesbyOhkawa

andShinohara(1979)startingin1885,thedegreeandexactnatureoftheeconomic

transformationhadremainedamatterofdiscussion,particularlyfortheinitialperiod

from1868 to the 1880s. Furthermore, the structural and spatial dimensionof the

economic transformation of the late 19th century has not been investigated in a

systematicmanner.

Thepaperproposesaquantitativeanalysisofthestructuralchangeoccurringduring

MeijiJapaneconomicgrowth,whileaccountingforitsregionaldimension.Buildingon

newGDPestimatesattheprefecturelevelforthebenchmarkyears1874,1890and

1909 (Fukao et al. 2015), we constructed estimates of labour force and labour

productivitybysector,andofprefecturelevelmigration.

In order to convert into international GK$ of 1990, instead ofMaddison’s (2001)

series,werelyonestimatesbyMizoguchiandNoshima(1993)tolinkrealGDPin1940

and1955.TheresultofourcalculationindicatesthatJapanwasstillapoorcountry

byEuropeanstandards,butourestimatesofpercapitaGDPatthecountry level is

1013 international GK$ of 1990. This is significantly higher than the 756 $ figure

extrapolatedbyMaddison(2010)onthebasisGDPgrowthestimatesbyOhkawaand

Shinohara(1979).

Onthebasisofthisnewdataset,weidentifieddifferencesandsimilaritiesineconomic

trends in the sub-periods 1874-1890 (Meiji I) and1890-1909 (Meiji II). The results

obtainedenabletoqualifytheMeijieconomicdevelopmentandthemainfindingscan

besummarizedasfollows.

- First, Japanwas already a higher income country by Asian standards, and living

standardswerewellabovesubsistencelevelsinallprefecturesca.1874.ThenewGDP

figure for 1874 implies a downward revision of the growth rate of the Japanese

economyinfirstpartoftheMeijiperiod.

-Second,theMeijierawasassociatedtoarapidchangeintheindustrialstructurein

aprocessthatcanbedescribedasashifttoModernEconomicGrowth.

-Third,incomeandlabourproductivitygapacrossregionsincreasedmarkedlyinthe

period 1874-1890. However, in Meiji II, labour productivity gap across regions

remainedstable.

- Fourth, the expansion of high labour productivity manufacturing activities was

mostlyconcentratedinlargecities.

Although the narrative of the economic transformation of theMeiji era is usually

associatedwith the heroic endeavour of Japanese entrepreneurswho successfully

appropriatedwestern technology, themacroeconomic evidence indicates that the

expansionofmanufacturinginMeijiIwasmostlybasedonindigenoustechnologies

associatedwithlowlabourproductivityandplayedoverallalimitedroleintherisein

living standards. It is only in Meiji II that high labour productivity manufacturing

activitiesstartedtoplayasignificantrole,mostlyinthemosturbanizedprefectures.

0

TheHistoryofViolenceoverthePastTwoMillennia:ArchaeologicalBoneTraumataasaSourceforEuropeanViolenceHistory

JörgBaten*andRichardH.Steckel**

*Univ.Tuebingen/CEPR/CESifo,**OhioStateUniv.andNBER

Abstract

Howdidtheintensityofinterpersonalviolencechangeoverthelasttwomillennia?Canwe

measureit,atleastapproximatively,andwhatmighthavecausedchangesovertime,aswell

asdifferencesbetweenregionsandsocialgroups?Therelevanceofsuchastudyhardlyneeds

to be stressed – personal security has always beenoneof themost important aspects of

humanwelfare.

Moreover,theabsenceofviolenceisapreconditionforthedevelopmentofsocialcapitaland

hence,economicgrowth.Takinga long-runperspectiveprovidescrucial insightsabout the

propensity of humans to act violently against others. Themajor challengeof a study that

covers two millennia is finding indicators that are sufficiently informative, reliable and

representative.Obviously,anysingleindicatorwillcontainbiasesormeasurementerrorifit

usedforsuchalongperiod,sothevalidityofthearchaeologicalevidenceisassessedcarefully.

Wealsocomparetheobservedtrendswithotherindicatorsofinterpersonalviolence.

Cranial traumataobserved in skeletons areoften causedby interpersonal violence, as are

traumata that canbe identifiedasweaponwounds.The shareof individualswithweapon

woundsorcranialtraumatarelativetoallindividualswithsufficientlywell-preservedskeletal

remainsservesasthemainindicatorofinterpersonalviolenceinthisstudy.

Oneofourmainfindingsisthatinterpersonalviolencedidnotdeclinedramaticallyduringthe

firstfifteenhundredyearsofthelasttwomillennia.Infact,violenceevenactuallyincreased

duringthelatemedievalperiod.Secondly,wefindgenerallylowersharesofpeoplesubjected

tointerpersonalviolenceinthenorthwesternpartofEurope,withaminimumvalueatthe

continentalNorthSeacoast(today’sNetherlandsandpartsofNWGermany).Frisiantraders

createdatradingempireinthisregionduringtheearlymedievalperiod.Apparently,trade-

averseviolencewascontrolledasincomesfromtradeallowedcertainlevelofautonomy.In

general,theMediterranean,andcentral,easternandsoutheasternEuropehadhigherlevels

of violence. We find that the cross-sectional patterns also confirm a human capital

interpretationofearlyviolencereduction:Therewere lowerviolence levels inurbanareas

fromtheHighMedievalperiodonwards–andthedeclineofviolencestartedearlierbehind

citywalls.Amongtheruralpopulations,nodownwardtrendcouldbeidentifiedbeforethe

earlymodernperiod.Wefindatentativeandpreliminarynegativeinterregionalcorrelation

betweenhumancapital indicators(suchasthenumberofmanuscriptswritten inmedieval

monasteries)andviolence.Areaswithhigherhumancapitaltendedtohavelowerviolence,

whichiscompatiblewithearlierresearchonpost-14th-centuryhomiciderates(Eisner2014).

Economicshocksandcrimein19th-centurySweden

ThorBerger

Abstract

Thispaperexaminestheimpactofeconomicshocksoncriminalactivityandwhether

anincreaseintradeopennessservestoexacerbateormitigatethislink.Analyzingthe

impactofharvestfailuresin19th-centurySwedenusinganewlyconstructedcounty-

leveldatasetwithannualobservationsoncriminalactivityandharvestoutcomes, I

showthatpropertycrimesalmostdoubledinthewakeofalocalizedharvestfailure

while violent crimes decreased significantly,which I corroborate by examining the

directeffectsoffoodpricesandwagesoncriminalactivity.Astherailroadnetwork

spread, however, the responsiveness of crime to local agricultural shocks fully

disappeared,astheincreasedopennessoflocaleconomiesreducedthevolatilityof

pricesand real incomes. These findings suggest that investments in transportation

infrastructurethatpromotetradeintegrationareanimportantmargintoshieldrural

citizensfromadverseproductivityshocks.

MonetaryPolicyandCounterpartyRiskManagementatBanquedeFranceinlate19thCentury

MaylisAvaro

GraduateInstitute–GenevaVincentBignon

BanquedeFrance

The last financial crises highlight the importance of operationalproceduresusedbycentralbankstocooldownfinancialdistress.Criticsinsistonthepotentialnegativeconsequencesonrisk-takingbehaviorofbroadening access to lender of last resort. We study the riskmanagement used by Bank of France to limit its exposure to ofcounterpartycreditriskinlate19thcentury.WeusearchivesfromtheheadofficeandthelocalbranchesoftheBankofFrancetodetailtheproceduresofsupervisionofthequalityandwealthofcounterparties.Moralhazardwascontainedbythecollectionofveryprecisepiecesofinformationonwealthandattitudetowardsriskofthoseagents.To show this, we construct the cross-section of all counterpartiesmonitoredduring1898bytheBanquedeFrancesupervisoryreports.Ourdatasethas1,665individualpresenterstothediscountwindowofoneofthe94localbranchesin1898withinformationontheiridentity,occupation, economic and social situations, wealth and financialpositionwiththeBank.WeestablishthattheBankoperatedaverywidediscountwindowbygrantingaccesstobanks,shadowbanksandnon-banks.TheBankusedthis information to discipline against counterparties by reducingrefinancingtoriskycounterparties.Thisisshownbyusingtheindividualinformation on all counterparties and testing whether rediscountingwasnegativelycorrelatedwiththeassessmentofthecentralbankonrisk-takingbehavior.Wealsodocumentsystematicdifferencesintermsofthetypeofcollateralpledgedbybanksornon-banks.TosecuretheirlendingwiththeBanquedeFrance,banksreliedontechniquesakintomicro-finance such as personal guarantees while non-banks pledgedmostly liquid securities. Yet we did not find any evidence of insiderlending, or cronyism in the choice of the volume of discount by theBanque de France. We conclude that this sophisticated informationsystem was set to protect its profits from the risks of default ofcounterparties.WecontributetothehistoricalliteraturebyaddingonNishimura(1995)in demonstrating that the Bank did not took credit risk with itspresenters todiscountwindow.WealsoaddonGoodhart andCapie(1994),asourquantitativemeasuresshowthattheBanquedeFrancealready act as the bank of banks in late 19th century France. Indeedfinancial intermediaries accounted for 84% of the total discountedvolumeand30%ofallbanksoperated inFrancepresenteddiscounts

withtheBankofFrance.TogetherwiththefactthattheBankwasthebankofthegovernment,thisestablishesitsroleasthecentralbank.

ActiveversusSpeculativeMonitoring:

Evidencefrompre-WWIParis-ListedFirms

EmilieBonhoure,LaurentGermain,DavidLeBris

Abstract

ThecorporatestatutesofthefivehundredfirmslistedontheunofficialParismarket

beforeWWIstatedtheamountofdividendsasafixedpercentageofprofits:asaresult,

managerscouldnotusedividendsasamarketsignal.Thissettingofferstheopportunity

tostudytheagencyexplanationofdividends,whileclearlyexcludingthesignaling

theory.Moreover,weinvestigatespeculative(active)monitoringcostsasproxiedby

distancebetweeninvestorsandthecompany’smainactivities(orheadoffice).We

confirmtheeffectofagencycostsandfindthatspeculativemonitoringcostsaremore

importantinexplainingdividendyield.

Why1990internationalGeary-Khamisdollarscannotbe

afoundationforreliablelongruncomparisonsofGDP

LiamBrunt

NorwegianSchoolofEconomics

AntonioFidalgo

FreseniusUniversityofAppliedSciences

Abstract

Using a large, new dataset of agricultural prices and quantities for 70 countries and

regions,we create fivenew internationalGeary-Khamis (GK)pounds– for 1870, 1845, 1775,

1705,aswellasasuperiorchainedseries.Weshowthatestimatedlevelsandchangesinoutput

perworkerlookmoreextremeusing1705internationalpoundsand1990internationaldollars,

comparedtoallotherseries.Growthratesappearsubstantiallyhigherusing1990international

dollars.Inshort,out-of-samplebasketsand/orpricescreateextremelyunreliableestimatesof

changesinrealoutput.Wefurthershowthatusingindividualcountrypriceindicescangenerate

substantiallydifferentestimatedgrowthrates,comparedtousinginternationalprices.Henceit

isnosurprisethatresearchersusingdifferentapproachesreachdifferentconclusionsregarding

relativeperformanceof countries in the long run: thedifferences are likelydriven largelyby

methodologicaldifferences.Inordertomakeprogressinunderstandinghistoricaldevelopment,

and avoid further confusion, we need to implement the most theoretically well-founded

methodology.

Themosttheoreticallywell-foundedapproachtocomparingrealincomeacrosscountries

istouseacommonsetof“international”pricestovalueoutputsinallcountries(or,alternatively,

todeflatetotalexpenditureoneachoutput).ThePennWorldTablesfollowthisapproach,using

data collected for theWorld Bank’s International Comparison Program. They have used GK

prices,whicharedefactoweightedaverageprices,wherethesharesofeachcountryinthetotal

outputofeachproductactasweights.Buthowdoyouthendealwithchangesinrealincome

overtime?Calculatethechangeinthepriceindexfromdatettot+1andthenusethistodeflate

thechangeinnominaloutput;tocovermultipleyears,chaintogetherchangesinthepriceindex

fromoneyeartoanother.Inthesameway,weshouldideallychaininternationalpricestomake

cross-countrycomparisons.

Theproblemisthatyouneeddataonoutput(orexpenditure)sharesofallcountriesfor

everyyearinwhichyouconstructGKprices.Whilstwehavemanyhistoricalpriceseries,wehave

fewhistoricaloutputseriesandthereforenoonehasattemptedtoconstructhistoricalGKprices.

Instead,astandardapproachhasbeentovalueoutputsforeveryyearusing1990international

dollars(asinMaddison,2001),allthewaybacktothetimeofChrist.Thissolvesthecrosssection

problem(i.e.weareusing“internationalprices”,which is lessbiasedthananarbitrarysetof

pricesfromonecountry).Butitintroducesatimeseriesproblem(i.e.boththecorrectweighting

ofeachprice,andtherelativeprices,havechangeddrasticallybetweenthecrucifixionandthe

2008 financial crisis); this will likely lead to biased estimates of changes in real output.

Theoretically, thebias can go eitherway, so its effect canonly be estimatedempirically:we

providethefirstsuchassessment.

TheEvolutionofBankLendingBehaviorinPost-WWIIBritain:

EvidencefromaNewNarrativeMeasure OliverBush,DepartmentofEconomicHistory,LondonSchoolofEconomics

Abstract Whatistheroleofbanklendingbehaviorinbusinesscycles?Diditscyclicalpropertieschangeafterretailbankingwasliberalizedinthe1970s?Diditprimarilypropagateshocksorwasitalsoasourceofshockstotheeconomy?Toanswerthesequestions,weneedtomeasurebanklendingsupply.Justascentralbankmoneyisapoorindicatorofmonetarypolicyincountrieswherethecentralbanktargetsapolicyrate,sobanklendingisapoorindicatoroftheloansupplywhenbanksofferflexiblefacilitiessuchasoverdrafts.Theuseofnarrativemeasuresofpolicywasamajorbreakthroughinmeasuringtheimpactofmacroeconomicpolicy(egRomerandRomer,1989,drawingonFriedmanandSchwartz,1963).Thesenarrativemeasuresarenotinfectedbyfluctuationsinthedemandformoney.Recognizingthatthesamelogicappliestomeasuringthebankloansupply,themajorcontributionofthispaperisanewnarrativemeasureofbanklendingpolicy.ThisisbasedonarchivalrecordsofmajorBritishbanksfromthe1950suntilthe1980s.Theirarchiveshavepreservednear-completerecordsofmessagessentonadailybasisfromheadofficestobranchescalled‘circulars’.Thesecircularscontaininstructionsrelatingtobanklendingpolicy,includingtheborrowingsectoraffectedandoftentherationaleforthechange.Therelevantinstructionsareweightedbybankandsectortoconstructanaggregatenarrativebanklendingpolicy.Whilethiswouldbeanigh-onimpossibletaskfortheUSbankingsystemasthereweresomanybanks,inBritainthelargestfivebanksaccountedforaroundhalfoftotalUKbanklendingandahigherproportionofUKbanklendingtoresidents.Asecondcontributionistoestimatetheimpactofbanklendingpolicyonthemacroeconomy.Controllingforcontemporaneousmacroeconomicforecastsandpolicy,Ifindthatalooseninginbanklendingpolicyhadasignificantpositiveimpactonbanklendingandmanufacturingoutput.Evidenceispresentedsuggestingthatbanklendingpolicydepressedoutputthroughanaggregatesupplychannel.Afinalcontributionistoassessthedriversofbanklendingpolicyanditsroleinthebusinesscycle.Narrativeandstatisticalevidencesuggestsbanklendingpolicyrespondedtoofficialcreditpolicyandtodevelopmentsinbankbalancesheets,particularlytheratioofadvancestodeposits.Despitethemajorbankingliberalisationinthemiddleofthesample,thebehaviourandeffectsofbanklendingpolicywerebroadlycomparableinbothhalvesofthistimeperiod.Curiously,thereissomewhatmoreevidenceofprocyclicalbehaviourbeforetheliberalisation.Evidencefromforecasterrorvariancedecompositionssuggeststhataswellaspropagatingothershocks,thebankingsystemwasaquantitativelyimportantsourceofvariationintheUKeconomyinthisperiod,withanoverallimpactsimilartomonetarypolicy.

GenderDifferencesinAbsenteeisminNineteenth-CenturyUSManufacturing

JoyceBurnetteWabashCollege

[email protected]

Abstract

Iusetwodifferentdatasourcestoexaminegenderdifferencesinabsenceratesinthe

nineteenth-centuryUS.First,Iusestatesurveysfromthe1890sthataskedworkershowmany

daysofworkthey"lost"intheyear.Ignoringdayslostduetolackofwork,thesimpleaverages

suggestthatwomenwereabsent10.5dayperyearandmenonly9.7days.Controllingfor

statefixedeffects,womenhadlowerabsences,butnotsignificantlyso.Thenumberof

dependents,however,hadasignificantlydifferenteffectonmaleandfemaleabsences.

Dependentsreducedmaleabsences,butincreasedfemaleabsences.Ialsousewagebooks

fromcottontextilefirmstomeasuretheabsenceratesofweavers.Femaleweavershadhigher

absenceratesthanmaleweavers,andinmostcasesabsencerateswerehigherthancurrent

absencerates.Amongfemaleweavers,absenceratesrangedfrom5to10percentofwork

days.AbsenceratesatLymanMillsfellbetween1850and1883,andwereloweratLymanthan

atPepperellMfrg.Co.in1883,perhapsbecauseLymanpaidhigherwages.Absenceswere

higherinthesummerthaninthewinter,andwereslightlyhigheronSaturdaysthanonother

daysoftheweek.Absenceswerehighernearholidays,suggestingthatatleastsomeabsences

weretakenforleisure.

BacktestingSystemicRiskMeasuresduringHistoricalBankRuns

ChristianBrownlees,BenChabot,EricGhysels,ChristopherKurz

Abstract

Inthewakeofthe2008financialcrisisanumberofsystemicriskmeasureswereproposedtoidentifysystemicallyriskyinstitutionsandmonitorriskinthefinancialsector.Amajorhurdleinevaluatingoftheefficacyofpredictorsoffinancialdistressisthelimitedavailabilityoffinancialcrisisdata.BankbalancesheetandstockreturndataisonlyavailableintheFDICerawhenfinancialcrisesareexceedinglyrare.InthisworkweemployanewdatasetcontainingindividualfirmlevelbalancesheetandstockreturninformationoftheNewYorkbankingsystembeforetheintroductionofFDICinsurance.Ournewdataallowustoevaluatetheperformanceoftwopopularsystemicriskmeasures,CoVaRandSRISK,duringthefrequentpanicsofthepre-FDICera.Ourevaluationexercisefocusesonassessingifsystemicriskmeasuresareabletodetectsystemicallyimportantbanksaswellasprovidingearlywarningsofaggregatefinancialsectorturbulence.Resultsshowthatduringpanictheproposedsystemicriskmeasuresperformedwell.BothCoVarandSRISKimprovepredictionevenaftercontrollingforotherpopularmeasuresoffirmrisksuchasvaluationandliquidityratiosormarketbasedValueatRiskmeasures.Thenewmeasuresareparticularlyusefulfortheex-antedetectionofsystemicallyriskinstitutions.

CurrencyRegimesandtheCarryTrade

OlivierAccominotti(LondonSchoolofEconomics)

JasonCen(UniversityofCambridge)

DavidChambers(UniversityofCambridge)

IanMarsh(City,UniversityofLondon)

Abstract

Thispaperexploits the time-seriesandcross-sectionalvariation inexchangerate regimes,

between fixed and floating, over the last century and studies the relationship between

exchangerateregimeandcarrytradereturns.Inordertomotivateourempiricalanalysis,we

extend the Lustig, Roussanov, and Verdelhan (2014) model such that it allows risk

compensationinforeignexchangemarketstodependoncurrencyregimes.Specifically,the

pricingkernelsofcountriesinthefixedregimearecharacterisedbysymmetricexposuresto

aglobal risk factorandas suchwe show that carry returnsbasedon fixed currencypairs

shouldbenear-zero.Conversely,thepricingkernelsofcountriesinthefloatingregimeare

asymmetricallyexposedtotheglobalriskfactorsuchthatcurrencieswithhighinterestrates

command a larger risk premium. Consistent with our model, the empirical analysis

demonstratesthattheoutsizedunconditionalreturntothecarrytradeisalmostexclusively

driven by the floating currency pairs in our sample. Furthermore, ourmodel also allows

regimeshockstoaffectcarryreturns.Empiricallywefindthatthecollapseofacurrencypeg

onaveragespillsoverintofloatingcurrencypairsresultinginnegativeshockstocarrytrade

returns.Suchcurrencyregimeshiftsmayofferanexplanationforthepositivemeanreturnto

thecarrytradeoverthelong-run.

Keywords:Exchangerateregime,Carrytrade

JELclassification:F31,G12

Thecontributionofinfrastructureinvestmentto

Britain’surbanmortalitydecline1861-1900

JonathanChapman,NewYorkUniversityAbuDhabi

Abstract

Between1851and1900mortalityratesinBritaindeclinedbyalmost20%.Overthesameperiod,

local government expenditure on urban infrastructure increased rapidly, so that by 1890

spendingbylocalauthoritiesaccountedforover41%oftotalpublicexpenditure,withmuchof

themoneyusedforwatersupplyandsewers(LizzeriandPersico,2004).Thissimplepatternleads

tothenaturalconclusionthatgovernmentsanitationexpenditurewasthedrivingforcebehind

theimprovementinlifeexpectancy.YettheroleofpublichealthinexplainingBritishmortality

declineinthenineteenthcenturyremainsdisputed.Theclassicexplanationofthedramaticfall

inmortalityratesafter1850,duetoMcKeown(1976),hasemphasizedtheimportanceofbetter

nutrition rather than improvements in the sanitary environment. More recent studies

(Williamson,2002;Szreter,2005),however,havequestionedhisconclusionwithoutendingthe

debate or pinning down the precise quantitative impact that sanitary investment had on

mortality.

ThispaperanalyzestherelativeimportanceofgovernmentpublichealthinvestmentstoBritain’s

mortality decline using a new panel dataset identifying town-level infrastructure investment

acrossEnglandandWalesbetween1861and1900.The stockof infrastructure investment is

measured using the per capita value of loans outstanding reported in town council annual

reports.Thistown-leveldataisthenlinkedtoinformationondecadalmortalityatthelevelof

Registrationdistrict,collectedfromtheRegistrarGeneral’sDecennialSupplements.

The resulting dataset is used in twomain analyses. First, ordinary least squares regressions

establish the fact that infrastructureexpenditurehadanegative impactonoverallmortality.

Oncedemographiccontrolvariablesortownfixedeffectsareincludedinthespecifications,there

isaclearevidencethatinfrastructureinvestmentledtosignificantdeclinesinmortalityrates.In

particular,infrastructureinvestmentisestimatedtoexplainbetween22%andover100%ofthe

declineinmortalitybetween1861and1900,withtherangedeterminedlargelybywhethertime

trendsareaccountedfor. Importantly, these findingsarerobust tocontrolling for theratable

valueofeachdistrict,indicatingthattheeffectsarenotmerelycapturingtheeffectsofgrowing

wealth(andhencepotentiallyimprovednutrition).

SincesimpleOLSregressionsmaynotfullyaccountfortheendogoneitybetweeninvestmentand

mortality,additionalspecificationsareestimatedusinglaggedinvestmentasaninstrumentfor

current investment. The results of the instrumental variables regressions show that

infrastructureinvestmentwasthemajorcontributortourbanmortalitydeclineinthesecondhalf

ofthenineteenthcentury.Themainresultsindicatethatbetween54%and60%ofthedeclinein

totalmortality is explained by infrastructure investment. Only considering the period before

1890, before new infrastructure such as tramways and electricity supply appeared in town

accounts, 88%of the total urbanmortality decline is explainedby infrastructure investment.

Additional results indicatethat investment inurban infrastructure ledtodeclines inmortality

frombothwaterborneandairbornediseases.Together,theseresultssupportanexplanationof

Britain’smortalitydeclinebasedpredominantlyoninvestmentinpublicinfrastructure.

LovingDay:InterracialMarriagesandIntergenerationalMobilityinthe

UnitedStates

JACKYSCHARLES*

UniversityofAdelaide

ABSTRACTThepost-abolitionperiodintheUnitedStatesexperiencedasequenceofeventsrestrictingthecivilrightsoffreedslavesandtheirdescendantswellintothetwentiethcentury.Onesuchrightwasthefreedomtochoosewhomtomarry.Anti-miscegenationlawsprohibitingblack-whitemarriageswerecommonand lastedwell intothe20thcentury.Overtimethese lawsalsoappliedtoAsians,particularlyinwesternstates.By1967anti-miscegenationlawswerestillexistentin16southernstatesuntiltheywerepermanentlyrepealedfollowingarulingintheUnitedStatesSupremeCourtcaseLovingvsVirginia,whentheSupremeCourtviewedsuchlawsasunconstitutional.Priorto1967,interracialmarriageswererare,however,duringtheperiod1980-2000interracialmarriageshavebeenonasignificantupwardtrenddoublingeverydecade.Inthispaper,Iexaminewhetheranti-miscegenationlawshinderedunionsthatwouldhaveresulted in higher incomes and social standing for minorities and their offspring usingindividualdatafromtheIntegratedPublicUseMicrodataSeries(IPUMS)one-percentsamplesoftheUnitedStatespopulationfrom1940to2000.Theresultsshowanegativerelationshipbetweenanti-miscegenation lawsand interracialmarriagerates,andalsoshowthat inter-marriedminorities have higher earnings and social status. Anti-miscegenation laws werethereforeabindingconstraintonindividualsinsomestatesaswellasindividualsbelongingtosomebirthcohorts(forexample,blacksbornduringthe1920sand1930sintheU.S.south).In order to study the relationship between interracial marriages and intergenerationalmobility, I linkfatherstosonsandcompare IntergenerationalElasticity (IGE)estimatesforsonsbornto interracialcouplescomparedtosonswhoseparentswere inanendogamousmarriage. The results suggest that interracial marriage is an important determinant ofintergenerational upward mobility among African Americans and other minorities. I alsofoundthatthereislowermobilityforindividualsbelongingtofamilieswherebothparentsareblack.ThusanAfricanAmericanchildcanexpectlowermobilityintheirlifechancesthanachildborntooneparentwhoisblackandtheotheriswhite.Giventhatnon-whiteincomesin theUnitedStatesareonaverage less than thatofwhite incomes,onecanexpect thathigherelasticities(thatis,higherIGEestimates),cantranslateintothepotentialpersistenceofgreatdisadvantagetochildrenfromlowincomefamilies.Thefindingsinthepapertakeinitialstepsinunderstandingplausiblelong-runconsequencesof interracial marriages. Future research can examine the relationship betweenintergenerational mobility and inequality with interracial marriage as a transmissionmechanismimpactinglevelsofinequality.Otherpossibleextensionstothisstudycouldbetoanalyseeducationdifferentialsof theoffspringofpersons inexogamousandendogamousmarriages,aswellas,toanalysetherelationshipbetweenintermarriageandtheblack-white

incomegap.ThusifsocialbarriersarereducedorifthereisincreasedsocialintegrationintheUnitedStateswillblack-whiteconvergenceinincomeoccuratfasterrates?

ThePeople,notthePlace.TheDeclineoftheNorthofEngland1918-2017:ASurnameInvestigation

GregoryClark,UCDavis,NeilCummins,LSE

Abstract

TheNorthofEnglandinrecentyearshasbeenpoorer, lesshealthy,andlesseducatedthantheSouth. Forexample, thechanceofan18yearoldmatriculating inOxfordorCambridgewasonlyabouthalfthatforthenorthasintheSouthin2013.Valueaddedperperson intheNorth is25%lessthan intheSouth. Lifeexpectancy intheNorth isnearlytwoyearsless.The decline of theNorth has twopossible sources. The first is thatwhen the classicindustries of the Industrial Revolution – cotton textiles, shipbuilding, coal and iron –declinedinthetwentiethcentury,thenorththenhadalocationaldisadvantagecomparedto the South in the new economy of the twentieth century. Accidents of geographydeterminepeoples’lifechances.Thesecondisthatthedeclinewasaproductofselectiveoutmigration of those with talent and ability out of the North, an outmigration thathelpedspeedtheindustrialdeclineoftheNorth.In this paperwe show, using surnames, that thedeclineof thenorthwas largely theproduct of the secondmechanism - selectiveoutmigrationof talent. But further thisoutmigration began even in the heart of the Industrial Revolution, before the NorthexperiencedadverseshockstoitsindustriesafterWWI.FurthermigrantstotheNorthbefore1914,whenthenetmigrationwaspositive,tendedtobenegativelyselected.Manysurnames inEnglandhadveryspecificorigins in theNorth,Walesor theSouth.Thuscirca1840near100%ofAinscoughs,BirtwistlesandCalderbankslivedintheNorth,near100%ofNorthcottsandVanstones livedintheSouth,andnear100%ofMorganslived in Wales. If adverse geography mattered, then the Northern surnames, stillconcentratedintheNorth,shouldintheaggregateshowworsesocialoutcomesnow.Ifselectivemigrationisthesource,thenNorthernsurnamesgloballyshouldshownonetdisadvantage.FurtherNorthernsurnameholderslocatedintheSouthshouldrepresentasocialelite.Using the surnames that were originally regionally distributed we show that thehypothesisofatalentdrainfromtheNorthissupported.Surnamesassociatedwiththenorthin1837shownodisadvantagerelativetothoseassociatedwiththesouthintermsofwealth,educationalattainment,occupation,andpoliticalstatusin2017inEnglandasawhole. FurtherholdersofNorthernsurnames intheSouthwerewealthier thantheSouthernpopulationasawhole,whileholdersofSouthernsurnamesintheNorthwerepoorerthantheSouthernpopulationasawhole.

The paper thus supports the primary role of ability and talent in explaining regionaldifferences in living standards and economic outputs. It also implies that policiesdesigned to aid the population in the North of England in the form of regionalregeneration investments, or encouragement of migration south, are likely to beineffectiveinboostingoutcomesfortheremainingnorthernpopulation.

UnionsandtheGreatCompressionofAmericanInequality,1940-1960

WilliamJ.CollinsandGregoryT.Niemesh

Abstract

ThewideningandpolarizationoftheU.S.wagestructuresincethe1970shasmotivatedan

extensiveliteraturethatstudiesinequality’schangingpatternsandrootcauses.Incontrast,earlier

inthetwentiethcentury,theU.S.experiencedalargedeclineinwageinequality,especiallyduring

the1940s,inwhatGoldinandMargo(1992)termed“theGreatCompression.”Thiseventhas

receivedfarlessattentionfromscholarsthanthelatetwentieth-centuryriseininequalitydespite

itsmagnitudeandpersistencewellintothe1960s.

Weinvestigatewhetherchangesinlabormarketinstitutions—specificallytheriseoforganized

labor—contributedtothemid-centurynarrowingofinequalityand,ifso,whetherthatcontribution

leftanimprintonlabormarketsbeyondthe1940s.Wedevelopnewevidencebasedonchangesin

inequalityanduniondensityattheleveloflocallabormarkets.Inessence,wetestwhetherplaces

exposedtolargerexogenousincreasesinuniondensitytendedtohavelargerdeclinesinwage

inequality,conditionalonmanyotherfactorsthatmayhavesimultaneouslyaffectedlocal

economies.Toaccomplishthis,wemakeuseofnewandlargemicro-leveldatasetsforthe1940

and1960censusesincombinationwiththe1-percentpublicusesampleforthe1950census

(Rugglesetal.2015).Wecombinelocal-levelinformationonthedistributionofworkersover

industriesin1940withnational-levelindustry-specificmeasuresofchangesinunionizationduring

the1940stomeasurecross-placedifferencesinexposuretounionization.Thisvariationin

exposuretounionizationformsthebasisoftheidentificationstrategy.Fromthecensusmicrodata,

itisstraightforwardtoderivelocalmeasuresofwageinequality.

The1940swereatumultuoustimefortheU.S.economyduetoWorldWarII.Therefore,isolating

theroleofunionsapartfromthemanyotherinfluencesonlocalwagestructuresposesachallenge

andmeritscautionininterpretingregressionresultsbasedondifferencesinchangesacrossplaces.

Nonetheless,wefindevidencethatplacesthatweremoreexposedtoincreasesinunionizationdue

totheirpre-existingindustrialstructureexperiencedsharperdeclinesinwageinequalityafter1940

whencontrollingforpotentiallyconfoundingfactorssuchasthevalueofwartimecontractstolocal

producers,theshiftintherelativedemandforskilledversusunskilledworkers,thepre-existingskill

levelofthelocalworkforce,andstateorregionaltrends.Althoughpreliminary,evidencedoesnot

suggestthatthispatternwasunderpinnedbythesortingofskilledworkersorfirmsoutoflocations

thatexperiencedsharpincreasesinuniondensity.Finally,theimprintofunionizationonwage

structureswaspersistentatthelocallevel.Long-differenceregressionsshowthatplaces

intensivelyexposedtochangesinunionizationinthe1940stendedtohavesmallerchangesin

inequalitybetween1940and2000.

AnEconomicConversion?RuralCooperativeBankingintheNetherlandsattheTurnoftheTwentiethCentury

ChristopherL.Colvin,StuartHenderson&JohnD.Turner

Queen’sUniversityBelfast

Abstract

RuralRaiffeisenbanksenteredthemarketforhouseholdfinanceintheNetherlandsatthe

turnofthetwentiethcentury,atatimewhenavarietyofotherformalincumbentsalready

existed. These new entrants were novel in many respects, especially in their unique

cooperative organisational form and in their dual emphasis on saving and loans. Yet, the

precise role they fulfilled, and the exact reasons for their existence, are still not fully

understood.

Inthispaper,weaddressthisfunctionalpuzzleinaquantitativeframeworkthatismotivated

bythreehypotheseswhichhavebeenadvancedinvariouspartsoftheexistingliterature,to

explainthetimingoftheirentry:(1)tomeetuntappedmarketdemandforfinancialservices

from the unbanked and underbanked; (2) as an organisational response to agricultural

depressionandtechnologicalchange;and(3)asameansofextendingandconsolidatingthe

influence of confessional, pillarised, sociopolitical organisations across Dutch society. By

consideringthesealternativeexplanations,weaimtodeducethefactorsthatprecipitated

entry,andtounderstandwhetherthosefactorsinfluencedsubsequentperformance.

Totestthesehypotheses,weacompileadatasetusinginformationcollatedinannualreports

producedbytheNetherlands’statisticalagenciesandsupplementthiswithtopographicaland

demographicdatafromothersources.Wedirectourattentiontotheyears1898,1904and

1909,asoverthishorizontheearlyentryofRaiffeisenbanksoccurs.Ourempiricalapproach

takes two stages. First,we address the factorswhich precipitated the entry of Raiffeisen

banks.Webeginbyusingbankageasadependentvariabletoascertaintheconditionsmost

criticaltotheentryofthefirstRaiffeisenbanks.Followingthis,weemploythepresenceinan

area,in1904,ofaRaiffeisenbank,andthenthepresenceofaRaiffeisenbankwhichentered

between1905and1909,asdependentvariables.Thisperspectivediffersfromthebankage

approach in that it adopts a municipality-level viewpoint as opposed to a bank-level

perspective,and thus likely reflects the initial catalyst(s) lessacutely,but insteadhelps to

revealwhethertheearlydriversofentryremainedimportantovertime.Subsequently,we

test whether the factors that induced entry are similar to those which drive post-entry

performance.

Overall,ourresultssuggest thattheexistenceofRaiffeisenbanks, intheDutchcontextat

least, should be understood as a response to both social and economic demands. Yes, a

sustained period of agricultural crisis in the late-nineteenth century and an absence of

(appropriate) incumbent financiers may have provided an economic rationale for their

existence,butitseemsunlikelytohavebeenasufficientprecondition.Rather,theCatholic

Church,bytakingadvantageofitsreligiousnetwork,couldprovidethenecessaryimpetusfor

theinitialdiffusionphase.However,oncethebankshadbeenestablished,theorganisational

modelofRaiffeisenbankswasthenabletobenefitfromefficienciesaccruedfromreligion-

related social collegiality, with the function of religion ultimately transitioning from

philanthropytoeconomy.

PricesandInformedTrading

GraemeG.Acheson(UniversityofStirling),ChristopherCoyle(QueensUniversityBelfast),

DavidJordan(QueensUniversityBelfast)andJohnD.Turner(QueensUniversityBelfast)

Abstract

Various information-based theorieshave identified linksbetween the levelof information

traderspossessandtheliquidityofstocks.Thisliteraturestatesthatstockilliquidityshould

increasewithincreasedlevelsofinformedtrading.However,therearesubstantialdifficulties

in testing this relationship as traders’ information sets are almost never observable. As a

result,studieshaveattemptedtoovercomethisissuebyassumingthatinvestorsthattrade

incertainwaysareinformed,orbyexaminingsmallsubsetsofinformedinvestorswhendata

becomes available, for example following illegal insider trading cases. Interestingly, these

studies generally do not find evidence that illiquidity and bid-ask spreads increase with

informed trading. In addition to the fundamental difficulty of identifying informed and

uninformedinvestors,therearefurthercomplicationswhentestingthisrelationshipdueto

thenatureofmoderntrading.Investorscantradestrategicallyanddisguisetheirintentions,

makingthesignalcomingfromanyindividualtradeuncertain.

Inthispaper,weattempttoovercometheseissuesbyusingauniquehistoricalcasestudyto

evaluate the fundamental relationship between information and prices.Weuse a unique

hand-collecteddatasetfromtheNorthBritishandMercantileInsuranceCompany,nowpart

oftheAVIVAGroup,inwhichwecanidentifyalltradersandtheirtradesinthesharesofthe

companyovera38-yearperiod.Thisallowsustobuildanovelandcomprehensivemeasure

of the volume of informed trading and to study how this affects measures of liquidity.

Specifically,ourmeasureofinformedtradingincludesallcompanyinsidersandprofessional

investorsthatboughtorsoldsharesduringtheperiod1882-1920.Incontrasttomanyrecent

empirical studies which are limited by the number of traders they can identify, we find

consistent evidence that increases in the volumeof informed trading are associatedwith

statisticallyandeconomicallysignificantincreasesintheeffectivespread.Thissupportsthe

classical microstructure theories of informed trading which suggest that stock illiquidity

shouldincreasewithincreasedinformationasymmetry.

Inaddition,weareabletoexploitthedisclosureoftradesbyexecutorsofwillsfollowingthe

deathofashareholderto identifya largesampleofuninformedtradesandevaluatetheir

impactonbid-askspreads.Weshowthatincreasesinthelevelofuninformedvolumerelative

toinformedvolumeareassociatedwithdecreasesintheeffectivebid-askspread,suggesting

thattheimpactofinformedtradingcanbelimitedifitistimedtoperiodsofhighuninformed

volume.WealsoshowthatwhiletheLondonStockExchangeclosedatthebeginningofthe

WorldWarI,tradingactivitycontinued,albeitwithalargedecreaseinliquidity.

TechnicalChangeandHumanCapitalInvestment:

EvidencefromtheIndustrialRevolution

AlexandraM.dePleijt,UniversityofOxford

ChrisMinns,LondonSchoolofEconomics

PatrickWallis,LondonSchoolofEconomics

Abstract

Inthispaperweexaminehowthearrivalofanewproductiontechnologyaffectededucationchoicesinlate18thcenturyEngland.Theperiodstudiedbetween1760and1800isatthebeginningofthelargestshiftinhistoryfromhandtomachinepoweredproduction,throughtheinventionandspreadofthesteamenginethatpoweredtheBritishIndustrialRevolution.Theresearchcombinesdetailedevidenceonthelocationandtimingoftheadoptionofsteamengineswiththerecordsofover300,000EnglishapprenticeshipsfromtherollsoftheCommissionerofStamps.Unlikepreviousstudiesthatfocusonthecross-sectionalrelationshipbetweenhumancapitalformationandthedensityoftechnology,weareabletoobservetheeffectsofthearrivalofnewtechnologyonforward-lookinghumancapitalinvestmentdecisionsinpanelsofEnglishcountiesandtowns.Ourmainfindingisthatthearrivalofsteampowerchangedthewillingnessofyoungpeopletopursueapprenticeships,whichforcenturieshadbeenthemainwayroutetoacquiringtheskillsrequiredfortheproductionofmanufacturedgoods.Inourfirstsetofresults,wefindthatcountiesexperienceda30percentfallintheshareofpopulationenteringintotextileapprenticeshiponceasteamenginewaspresent.Despitethepossibleassociationwithmachinedesignandmaintenance,mechanicalapprenticeshipalsosawadeclineof15percentfollowingthearrivalofsteam.Merchantandprofessionalapprentices,whoweretradingthegoodsproducedbycraftorindustry,weremostlyunaffected.Thecountyresultsaresupportedbyanalysisofflowsintoapprenticeshipatamorelocallevelthatexploitsmoredetailedinformationonthelocationofsteamengines.Herewefindanegativerelationshipbetweenproximitytosteamandapprenticeshiprates:raisingthedistancebetweenatownandthecloseststeamengineby25kilometresispredictedtoraiseapprenticeshipratesby6to7percent.Thesefindingsshowthatthepopulationrespondedtotheemergenceoftechnologythatwoulddramaticallychangethenatureofproductionandworkinthefuture,andthatmuchoftheresponsewaslocal.ApprenticeshipfellfirstinNortherncountrieswhereindustrialtownsandcitieswithfactory-basedproductionemergedearlier.AsimilardeclineinhowworkersweretrainedwasnotseeninSouthernandEasternEnglandintheearlypartoftheIndustrialRevolution.

TheImpactofInstitutionsonInnovation

AlexanderDonges(UniversityofMannheim)Jean-MarieA.Meier(LondonBusinessSchool)

RuiC.Silva(LondonBusinessSchool)

ABSTRACT

Innovationisoneofthemostcriticalenginesofgrowthandprosperity.However,thereare

stilllargegapsinourunderstandingofwhatdrivesinnovationandtherelativeimportanceof

thedifferenteconomicforces. Inthispaper,westudythelong-runimpactof institutional

qualityon innovation.Usinganovelhand-collected county-leveldata seton theGerman

Empire,we findaneconomically large impactof the inclusivenessof local institutionson

innovation.Regionswithmoreinclusiveinstitutionsweresignificantlymoreinnovativethan

regionswithextractiveinstitutions.

Weusethetimingandgeographyof theFrenchoccupationofdifferentregionsafter the

FrenchRevolutionof1789asanexogenousshocktotheinstitutionsofthoseregions.Based

onanovelcounty-leveldatasetforImperialGermany,weprovideevidencethatcounties

whoseinstitutionsweremoreinclusiveasaresultoftheFrenchoccupationbecamemore

innovativeinthelong-run.Inourmodel,theinstitutionalreformsthatareassociatedwith

movingfromacountywithnooccupationtoacountywiththelongestoccupationresulton

averageina132%increaseinthenumberofpatentspercapita.

Additionally,weinvestigatewhethertheimpactofinstitutionalreformsisweakerincounties

wherepotentialimpedimentsfortheeffectiveimplementationofsuchreformsexisted.Our

resultsshowaweakereffect incountiesthatwerepartofecclesiasticalstatesbeforethe

Germanmediatisation of 1803. By contrast, we observe a stronger effect of reforms in

countieswherelargecitiesalreadyexistedbeforetheFrenchoccupationandincountieswith

goodaccesstofinance.Theseresultsprovideadditionalinsightsintothewayinstitutionscan

unleashinnovativeactivity.Ourfindingssuggestthatinclusiveinstitutions,accesstofinance

andculturedonotenteradditivelyintheproductionfunctionofpatents.Instead,theyenter

multiplicatively.

Our results are robust to different model specifications including various geographical

subsamples anddifferent reformmeasures. Furthermore,wediscuss and test a seriesof

alternativechannelsthatcouldexplainwhycountiesthathadbeenoccupiedbytheFrench

becamemoreinnovativeinthenineteenthcentury.Inparticular,weruleouttheconcern

that our results are driven by differences in the local availability of natural resources

(especiallycoal)anddifferencesinthedegreeofindustrialization.Marketintegrationcould

beanotherchannelthatfosteredinnovativenesssincetheFrenchoccupationtriggeredthe

territorial reorganization of German states by the dissolution of small, formerly political

independentterritories.However,theeffectofreformsremainsstrongifweincludeproxies

formarketintegration.Furtherteststakeregionaldifferencesinhumancapitalandthelocal

provisionoffinancialservicesintoaccount.Moreover,weruleoutthatpastdifferencesin

thepatentlawexplainourresults.

Thefindingsofthispaperpointtoinstitutionsasafirstorderdeterminantofinnovationand

highlighttheroleofinnovationasakeymechanismthroughwhichinstitutionsmayleadto

economicgrowth.

SocialMobilityintheLongRun–EvidencefromtheCityofZurich

GiacominFavre*,JoëlFloris,andUlrichWoitek

DepartmentofEconomics–UniversityofZurich

Abstract

WeanalyseintergenerationalmobilityinZurichoverthecourseofthe19thand

thebeginningofthe20thcentury.Socialmobilityiscloselyrelatedtoeconomic

inequality. Hence, studying the determinants of mobility is central to

understanding inequality. In this paper, we focus on changes in the level of

mobility,theinfluenceofgrandfathersontheeconomicstatusofindividuals,and

covariatesofmobility.

Zurichwas themost important city in the industrialising north-eastern part of

Switzerland.Thedataavailableareuniqueandallowstudyingthe issuesraised

aboveindetail.Weusedataoncitizensoriginatingfromthecitizens'directories

(Bürgerbuch) of 1794 to 1926. The directories list all male citizens with their

occupation, military ranks, public offices, and a detailed link to their family

members.Thelinkenablesustoassignfathersandpaternalgrandfathersdirectly

torelatedindividuals.Thisisamajoradvantagewhenanalysingsocialmobility,as

onedoesnotneedanylinkingmechanism.Wecombinethisdatabasewithdata

on wealth from the municipality tax directories (Gemeindesteuerregister)

availablefor1858,1893,1904,1912,and1929.

Ourdatashowthattheoveralldistributionacrosssocio-economicpositions(SEPs)

changedstronglyovertime,withaconcentrationtowardsmediumSEP1.Mobility

*Correspondingauthor:UniversityofZurich,DepartmentofEconomics,Zürichbergstr.

14,8032Zurich;email:[email protected]'soccupationattheageof40.

tables show that socialmobilitywas comparatively lowandevendecreased in

somedimensionsovertheobservedperiod.Wefindevidenceforadirecteffect

ofpaternalgrandfathersontheindividuals'outcomes.Finally,weregresstheSEP

ofindividualsinanologitmodelontheSEPoftheirfathers(controllingforseveral

socio-economic characteristics) and the family structure. Paternal networks,

geographic mobility, and (on a smaller scale) wealth facilitated social

advancementofanindividual.Familystructure,ontheotherhand,didnothave

aneconomicallysignificant impact. IfthefathercouldincreasehisSEPoverthe

courseofhislife,thesonwasmorelikelytoachieveanevenhigherSEP.Among

allthedeterminantswelookat,SEPofthefatherhadbyfarthelargesteffecton

theeconomicstatusofanindividual.

ForeclosedRealEstateandtheSupplyofMortgageCredit

byBuildingandLoansduringthe1930s

PriceFishback(UniversityofArizonaandNBER)aSebastianFleitas(UniversityofArizona)

JonathanRose(BoardofGovernorsoftheFederalReserve)aKenSnowden(UNCGreensboroandNBER)a

Abstract

SinceBernanke(1983)demonstratedthatbankfailureshadrealimpactsoneconomicactivityduringthe1930s,therehasbeengeneralrecognitionthatdisruptionsincreditchannelscontributedtothedeflationaryforcesthatwereatworkduringtheGreatDepression.ThisprojecttakesafirstlookatthesourceandimpactsofcreditdisruptionswithinthemortgagemarketduringtheseverehousingcrisisthataccompaniedtheDepression.Weexaminetheimpactthatforeclosedrealestateowned(REO)onthebalancesheethadonnewlendingactivitywithintheBuilding&Loan(B&L)industry.B&Lswerethenation’smostimportantinstitutionalhomemortgagelenderin1930.Asforeclosureratesroseduringthe1930s,REOincreasedtounprecedentedlevelsasashareofB&Lassetsanddecreasedtheircapacitytogeneratenewloans.Toassessthemagnitudeofthecreditrestriction,detailedannualbalancesheetandnewlendingactivitywerecollectedfor653B&LsoperatinginIowa,NewYork,NorthCarolina,andWisconsinduringthe1930s.Weexaminethepanelinmodelsthatincludedetailedmeasuresofeachinstitution’sassetsandliabilities,B&L,county,yearandcounty-by-yearfixedeffectstocontrolforinstitution-specificcharacteristicsandforfactorssuchaschangesincountyincomeandlocalshockswithinhousingmarkets.TheresultsshowthatREOhadastatisticallysignificantnegativeimpactonnewlendingbyB&Lsduringthe1930s.AonestandarddeviationintheREOsharevariablecausedadecreaseof4.7percentagepointsinnewloansasashareoftotalassets,whichisroughlyaboutone-thirdofthemeanvalueatthetime.Between1930and1935therapidriseinmeanREOshareofassetscontributedtoover80percentofthereductioninthemeanvalueofnewloansasapercentageofassets.aFishbackandSnowdenacknowledgethefinancialsupportprovidedbyNationalScienceFoundationGrantSES-1061927.TheviewspresentedinthispaperaresolelythoseoftheauthorsanddonotnecessarilyrepresentthoseoftheFederalReserveBoardoritsstaff,ortheNBER.

TheVolatilityofMoney:TheNewYorkCallMoneyMarketandMonetaryPolicyRegimeChange

CarolineFohlin

Abstract

ThispaperpresentsandanalyzesanewdatabaseofdailycallloanratesinNewYorkfrom1900to1930,coveringthefinancialcrisesof1901,1907,1914,1920/1,and1929aswellastherapidchangesinthefinancialmarketsfromWorldWarItotheGreatDepression.IaugmentthesedatawithNYSEtransactionvolumeandwiththeweeklyvolumeofcallloansstartingin1919.

Thecallmoney(orbrokerloan)marketprovidesrenewableovernightloanstobrokerstofundoperationsinfinancialmarkets,oftenspeculativetradingusingmarginpurchases.Inthe19thandearly20thcenturies,ratesoncallloansfluctuatedwidelyandusuallyfollowedaseasonalpatternduetotheheavyuseofcorrespondentbankfunds,oftenfromagriculturalregionsofthecountry.Contemporaryobserversandeconomichistorianshavepointedtothisvolatility—andtheratespikesthatcharacterizedthemarket—asdriversoramplifiersoffinancialcrisesintheNationalBankingEra.Aftertheregulatoryblitzofthemid-1930s,callloansbecamemorecloselycontrolledandlendingratesdroppedtolowandstablelevels.Pastresearchershavedebatedthetimingofthisshift,andinparticular,whetherratesbecamemorestableandlessseasonalaftertheopeningoftheFederalReserveSysteminNovember1914.SomehavepositedthattheimplementationoftheAldrich-VreelandAct,whichprovidedfor‘emergencycurrency’tobeprovidedincaseofcrisis,astheturningpoint.Usingmynewlygathereddailydata,Ishowthatcallloanratesactuallystabilizedevenearlier—immediatelyfollowingthePanicof1907,manymonthsbeforeAldrich-VreelandandalmostsevenyearspriortotheopeningoftheFed.Moreover,usingthenewdailydata,IshowthatdespitethestabilizationeffortsoftheFed,callmoneyratesreturnedtoasimilarboomandbustpatternduringboththepost-WWImini-bubble(1919-21)andthemoredramaticbubbleofthelate1920s—albeitwithslightlylessvolatilityandnoneoftheenormousspikesoftheerabeforethePanicof1907.Onlyaftertheregulatoryinterventionsofthemid-1930s,didthecallloanmarketfullystabilize.

“NowSheIsMartha,thenSheIsMary”:

theInfluenceofBeguinagesonAttitudesTowardWomen

AnnalisaFrigoandEricRoca2IRES/IMMAQ,UniversitéCatholiquedeLouvain3

Abstract

When 12th-century young women in the Low Countries decided to live together and care forthemselvesincommunitieswithoutmaleintervention,theytriggeredachangeinattitudestowardwomen.Theyledareligiouslifeofcontemplationandprayerwhileearningalivingaslabourersorteachers.Contrarytonuns,theynevertookformalvowsnor livedcloistered.Hence,thebeguinestatus grantedwomen the possibility of deliberately delayingmarriage,weakening the trade-offbetweenfamilyandprofessionalchoices,eitherlayorreligious.Thisstudyfollowstheculturallegacyofthese``feminist''forerunners,calledbeguines,untilthe19thcenturyandshowsthelong-lastingeffectstheyhadongender-relatedeconomicoutcomes,eveninplaceswheretheyhaddisappeareda longtimeago.Weclaimthattheself-samevaluesthatputwomeninhigherregardweretransmittedacrossgenerationsleadingtoamoregender-equalsociety.Ourempiricalanalysisdocumentsthat,almost5centuriesaftertheadventofbeguines,theintensityofbeguinagepresenceleftanimportantimprintoncomparativegendergapacrossBelgiantowns.Building a novel dataset featuring the exact location of each beguine community in Belgiumcombinedwith19thcenturycensusdata,weshowthatwageandliteracydifferentialsbetweenmenandwomenweresmallerinthosemunicipalitiesexposedtothepresenceofabeguinageinthepast.Aninstrumentalvariablestrategysupportstherobustnessofourfindings.Inparticular,usingchangesinthepoliticalorganisationthroughwhichsomevillagesbecamemoreattractivetobeguines,weestablish that the variation in gender literacy and wages is indeed related to the presence ofbeguinages.Ourresultscontributetotheextensiveeconomicliteraturedocumentingthepersistenceofgendernormsandreligiousinstitutions.

2Electronicaddress:[email protected];[email protected]/19-063on“FamilyTransformations:IncentivesandNorms”(FrenchspeakingcommunityofBelgium).

TakingoffandslowingdownlikeChina

EricGirardinAix-MarseilleUniversity,Aix-MarseilleSchoolofEconomics,CNRS&EHESS

([email protected])

HarryX.WuInstituteofEconomicResearch,HitotsubashiUniversity

([email protected])

Abstract

AreChina’spost-reformgreat industrial spurtand thesubsequent substantialgrowthslowdownuniqueevents,ordotheyconformtoapatternsetpreviouslybysimilarlateindustrializers, Japan or Russia/USSR, and by China's own history? We answer thisquestionwith an empirical reassessment relying on three pillars: a focus on factoryindustrialoutputbasedondatareconstruction,benchmarkingagainstChina’stwopeersandtime-seriesmodellingofgrowthregimesoverauniquelylongtime-spanfromthelate19thcentury.

Wereconstructannualdataon(percapita)factoryindustrialactivityforChinainorderto avoid the distorting mismeasurement biases in official data. We then model thefactoryindustrialgrowthexperienceofsimilarlatecomers,JapanandRussia/USSR,sincethelate19thcentury,soastodetectthefeaturesoftheirgreatspurtsandslowdownepisodes. This enablesus tobenchmark theexperienceofChina, comparingwith itspeers,onaslongasample,thegreatspurtsandstablegrowthepisodesdetectedwithalternative industrial output series. We estimate growth regimes with a Markov-switchingmodelàlaHamilton(1989)inamulti-regimeframeworksuitedtoemergingeconomies,augmentedtoallowforaregimeofrecoveryfromcrisis.

Weobtainthreemainresults.First,industrialgrowthintheselatecomereconomies,ataveryhighspeedduring“greatspurts”(Gerschenkron,1962), isshort. InthecaseofChinaitlastedforaperiodofslightlyoverahalfadecadeafterWTOentry,ratherthantheofficially-claimedthreedecadesfromthe1980s.ThisshortdurationwassimilartothegreatindustrialspurtsinJapaninthe1960s,andtheSovietUnioninitsfirsttwofive-yearplans.Second,aprior,first,greatspurttookplacesimultaneouslyinthelate19thcenturynotonlyinJapanandRussia,butalsoinChina,whereithadasimilarspeedanddurationasduringitssecondspurt.Third,whatmakesChinauniqueistheexceptionallyhigh speed and resilience of its stable growth regime,which arose in the early 20thcentury,intheinterwarperiod,andre-establisheditselfinthefirsttwodecadesafterthereforms.Howevertherecentslowdownpertainstostagnation,Japanesestyle,nottostablegrowth.

IdentifyingHistoricalShockstotheMarriageDecisions:

TheageatmarriageoftheKoreansfromthelate11thtoearly20thcentury

SunGo(Chung-AngUniversity,Korea;[email protected])HeejinPark(KyungpookNationalUniversity,Korea;[email protected])

Abstract

Thetimingofmarriagehasbeenakeyfactorofpopulationdynamicsinworldhistoryfromtheearliesttimes.Previously,fewestimatesofthelong-runtrendofageatmarriagehavebeenavailableduetodatalimitations.Wetacklethisproblembyconstructingauniquenewcountrywidedatasetspanninganunusuallylongperiodfromthelate11thtoearly20thcentury.Thedataconsistof1,717recordsofKoreanmaleandfemalenobles,whowerebornin1068-1938andmarriedin1091-1954.Collectedfromepitaphs,marriageletters,andliterarycollections,thedatacontainindividualinformationaboutbirth,death,marriage,governmentpositions,andfamilymembers.Usingthedataset,wenonparametricallyestimatethelong-runtrendoftheageatfirstmarriageofKoreanmenandwomenfromthe11thcenturybylocalmeansmoothing.Ourtrendestimatesshowthatthemales’andfemales’agesatfirstmarriageinitiallymovedtogetherwithaboutatwo-yeargapbytheearly15thcentury,whenthedivergenceofthegender-specifictrendsbegan.Men’sageatmarriagecontinuedtodecline,whereaswomen’sageatmarriageremainedalmostconstantafter1500,leadingtoacrossofthegender-specifictrendsinthesecondhalfofthe18thcenturyandpopularizationofyoungmenmarryingolderwomen.Toexplainthedifferentialtrendsofageatmarriagebygender,weexaminedtheeffectofhistoricalevents,suchaswar,rebellion,epidemics,disaster,politicalregimechange,anddraftingunmarriedwomen,onthehazardofmarriage.Wefoundthattheforcibledraftsofyoungunmarriedwomenandrebellionconsiderablyraisedthehazardofearlymarriageofbothmaleandfemale,whereaswar,epidemics,anddisasterdidnotrevealacleareffectontheageatmarriage.Ourestimationresultsshowthatageatmarriagewasreducedbyabout6percentwhenrebellionhappened.TheincidenceofGongnyeo,aforceddraftofwomenforMongol,Ming,andQingChina,alsoreducedageatmarriagebyabout20percent.ThisisconsistentwithpreviousliteratureinKoreanhistory,presentingvariousanecdotesaboutearlymarriageinstigatedbyaforceddraftofwomenoranunstablepoliticalsituation.However,wefailedtofindanysignificantgenderdifferencesintheeffectsofthehistoricaleventsonageatmarriage,especiallyaftercontrollingfortheyearlytrend.

RentsandWelfareintheSecondIndustrialRevolution:

EvidencefromNewYorkCity

RowenaGray,UCMerced

Abstract

ThispaperpresentsanewdatasetofrentalpricesforNewYorkCityhousingfortheperiod

1880-1910,drawnfromadvertisementsfoundin5historicalnewspapers.Thisaddress-

levelrental information isgeocodedonahistoricalmapofManhattanIslandandthus

linkedtoaverydetailedsetoflocationalcharacteristics.Themainchallengeincompleting

thegeocodingtaskwaswherepublichousingprojects(orprivatedevelopmentssuchas

atStuyvesantTown)orothermajornewbuildings(PennStation,forexample)havebeen

constructedsince1910whichmayhavechangedthestreetmapsubstantially.Thedata

wasmanuallycheckedseveraltimestoensurethatunitsarelocatedcorrectlyandsome

regressionsrestricttoobservationsthatcouldbecodedwithfullconfidence.Thepaper

thenuseshedonicregressiontechniques,astandardinthehousingliterature,togenerate

a quality-adjusted rental index for those years and to investigate the value of each

apartmentcharacteristicandlocationalamenity/disamenityintherentalmarket.Theaim

istodevisenewestimatesoftheurbanhousingcostandqualityaroundtheturnofthe

twentiethcenturyandtoinformmeasuresoftheurbanstandardoflivingmoregenerally

atthattime.Wecanfurtherexplorehowthehousingmarketfunctionedinresponseto

substantialchangesinbuildingregulationandtransportationandhowcostsevolvedfor

consumersatdifferentincomelevelsandlivingindifferentneighborhoods.

COLONIALVIRGINIA’SPAPERMONEYREGIME,1755-1774:

VALUEDECOMPOSITIONANDPERFORMANCE

FarleyGrubbEconomicsDepartment,UniversityofDelaware

Abstract

TheBritishNorthAmericancolonieswerethefirstWesterneconomiestoemitsizableamounts

ofnon-banknotepapermoney.Thesepapermoniesservedasacirculatingmediumfor

domestictransactionswithineachcolony.In1755,Virginiabecamethelasttoemitpaper

money.TheperformanceofVirginia’spapermoneycontributedtotheconflictwiththeBritish

CrownovercolonialmonetarypowersandprovidedParliamentjustificationforpassingthe

CurrencyActof1764.Thisconflictcontributedtorevolutionarysentiments.Irregularactivities

byVirginia’streasureralsooccupiedasubstantialamountoflocalpoliticalattention.Virginia’s

administrativestructurewasalteredasaresult,withthepositionsofTreasurerandSpeakerof

theHousenolongerheldbythesameperson.

PapermoneywascreatedbytheVirginialegislatureanddirectlyspentbythatlegislature

throughitstreasury.Legislature-issued,colony-specificpapermoniesweretheonlypaper

moniesincirculation.Nopublicorprivateincorporatedbanksissuingpaperbanknotesexisted

incolonialAmerica.Priortoemittingpapermoney,Virginia’smediaofexchangeconsistedof

barter,typicallyinvolvingbookcredittransactionsandtobacco—oftenintheformofclaimsto

tobaccoortobacconotes;personalbillsofexchangeandpromissorynotes;andforeignspecie

coins.Thecompositionofthismediaisunknown,thoughspeciecoinswereconsidered

relativelyscarce.

IapplymydecompositionmodelforinsidemoniestoVirginia’spapermoneytotrackthe

determinantsofthepapermoney’svalueovertime.Imeasurewhetherandtowhatextentthis

papermoneyfunctionedas“money”asopposedtojustbeingabarterasset.Iestablishthe

timingandestimatethemagnitudeoftheriskattachedtothismoneywhenmonetarytroubles

weresuspected.Ialsoconstructthequantitativemonetarydataneededtoexecutethis

approach.

Theapplicationofthisdecomposition-of-moneymodelshowsthatVirginia’spapermoneywas

predominantlyabarterasset.Itfunctionedasazero-couponbondandnotafiatcurrency.It

hadasmalltransactionpremiuminnormalyears—enoughtomakeitthepreferredmediumof

exchangefordomestictransactions.Thistransactionpremiumwaspositivelyrelatedtothe

quantityofpapermoneyincirculation.Asthequantityincreased,itgainedubiquityand

familiarityofuse,leadingcitizenstopayapremiumaboveitsreal-assetpresentvalue.This

associationsiphonedoffpriceinflationpressurescomingfromincreasesinthepapermoney

supply,leavinglittleassociationbetweenthequantityofpapermoneyandprices.Virginia’s

papermoneytradedbelowfacevalueduetotime-discounting,notdepreciation.Scholarsof

colonialAmericanpapermoneyhavehabituallyconfusedtime-discountingfordepreciation.In

yearswithmonetarytroubles,thepapermoneyexperiencedamoderateriskdiscounttoits

real-assetpresentvalue.Counterfeiting,however,wasnotamajortrouble.Thelegislaturehad

thetoolsandusedthemtoeffectivelymitigatetheeffectsofcounterfeitingonthevalueofits

papermoney.

AtmosphericPollutionandChildHealth

inLateNineteenthCenturyBritain

RoyE.Bailey(UniversityofEssex)

TimothyJ.Hatton(UniversityofEssexandAustralianNationalUniversity)

KrisInwood(UniversityofGuelph)

ABSTRACT

Inthispaperweinvestigatetheeffectsatmosphericpollutiononthehealthanddevelopmentofchildrengrowingupamidtheenvironmentalconsequencesoftheindustrialrevolutionthatwasfoundeduponcoal.WeestimatetheeffectsofemissionsfromcoalcombustiononchilddevelopmentbyanalysingtheheightsonenlistmentduringtheFirstWorldWarof2,235menborninEnglandandWalesinthe1890s.InBritain,emissionsofblacksmokewereontheorderoffiftytimesashighastheywereacenturylater.Whileagrowingliteraturehasidentifiedtheadversehealthoutcomesofatmosphericpollutioninrecenttimes,lessattentionhasbeenpaidtothemuchheavierpollutionofthepast.Indeed,thefocusofstudiesofthenineteenthandearlytwentiethcenturyhasbeenalmostexclusivelyontheeffectsofinvestmentinwaterandsewagesystems.Andwhilethesestudieshaveestimatedtheeffectsoflocalconditionsonmortality,muchlessattentionhasbeenpaidtotheongoinghealthoutcomes,asrepresentedbytheheightsofthosethatsurvivedpollutedenvironmentsduringchildhood.

WeusetheoccupationalstructureofadiverserangeoflocalitiesinBritainattheturnofthetwentiethcenturytoderiveanindicatorforlocalindustrialcoalcombustion.Ourresultsindicatethatthisproxyforlocalatmosphericpollutionhadsignificantnegativeeffectsontheadultheightsofthosethatgrewupincrowdedindustrialcitieswherethepresenceofblacksmokewasordersofmagnitudegreaterthantoday.Althoughourmeasureofindustrialpollutionisindirect,theresultsareplausibleandtheysurviveanumberofrobustnesschecks.Inparticular,weshowthattheresultsarenotsimplyduetooccupationalselectionorgeographicmobility.Inadditionwefindevidenceconsistentwiththechannelofinfluencerunningfromcoalintensitytorespiratoryillnessandthencetoheight.Theeffectthatweestimateamountstodifferenceofalmostaninchbetweenthemostandleastpollutedlocalities.Thesubsequentreductionofemissionsfromcoalcombustionisonefactorcontributingtotheimprovementinhealth(andtheincreaseinheight)duringthetwentiethcentury.

TheRoadHome:

TheroleofethnicityinSovietandpost-Sovietmigration

Young-ookJang,LSEEconomicHistory

[email protected]

Abstract

Theconventionalwisdominthemigrationliteratureisthatpotentialmigrantsdecidetomovewhenthedestinationcanofferbettereconomicopportunitiesthanthesource.However,intheSovietandpost-Sovietcontext,Iarguethatethnicidentitywasasimportantaseconomicconditionsindeterminingmigrationsdecisionanddestinationchoice.Tosupportthisargument,Ifirstconstructanoveldatasetastotheregionalnetmigrationratesofmajorethnicgroupsandthenregressthemonethnicandeconomicvariables.

TheUSSRhadbeenhometoover100differentethnicgroups,including15titularnationals(e.g.ethnicRussians,Ukrainians,Kazakhs,etc.)andmanyethnicminorities(Germans,Jews,Tatars,etc.).TheSovietleaders’effortsforbalancedregionaldevelopmentand“ethnicmixing”leftthesedifferentethnicgroupsspreadacrossitsvastterritories.ThesuddencollapseoftheSovietUnion,however,broughtmanychangestotheseethnicgroups.ManyofthemhadtofacethenationalistpoliciesofindependentformerSovietUnion(FSU)republicsarisingduringthestate-buildingprocessinthe90s.Also,thepolicymakershaveincentivestoincreaseethnichomogeneitybyattractingtheirco-ethnicsabroadtoavoidthenegativeimpactofethnicfragmentation.Theseformedpushandpullfactorsandmayhaveworkedtoreversethetrendof“ethnicmixing”toward“ethnicun-mixing”.

ThisreverseisclearlyseeninthedatasetnewlyconstructedusingaresidualmethodbasedontheSovietandpost-Sovietcensusdataandadministrativevitalrecords.ThedatasetshowsthatmanytitularnationalitieswhichhadbeendistributedacrosstheSovietterritoriesmovedtowardstheirowntitularFSUstates,e.g.KazakhstoKazakhstanorUkrainianstoUkraineafterthecollapse.Thisimpliesthatthepotentialmigrantsdidconsidertheethnicaffinitywhentheydecidetomoveorchoosethedestination.

Furthermore,econometricanalysesalsoconfirmtheinfluenceoftheethnicvariableon

migrationdecision.TheOLSandHeckman2-stepestimationsconsistentlyshowapositiveandsignificanteffectoftheshareofanethnicgroupinaregionontheirnetmigrationrates.Thismeansthatthemigrantsaremorelikelytodecidetomoveoutofaregionwhentheyhavefewerco-ethnicsintheregionand/ortheytendtochoosethedestinationswheretheproportionoftheirco-ethnicsintheregionalpopulationishigh.Theresultsarerobusttothechangesinthecombinationofothercontrolvariables,suchaswages,housingspace,weather,crimerates,thenumberofmedicalstaff,etc.

Insum,Iarguethattheethnicidentityworkedasacrucialfactorshapingthemigrationpatternsduringthetransitionperiod.Theconstructionofdataregardingethnicmigrationwasentirelynewintheliteratureandthequantitativeanalysissignificantlyimprovedfromsomeeconometricstudiesdealingwithanethnicaspectofpost-Sovietmigration.ThecloserlookattheethnicallydrivenSovietandpost-Sovietmigrationisexpectedtoexplaintherecentriseofsoil-and-bloodtypenationalismwhichhasbeenconspicuousintheworldwideanti-immigrantsatmosphere,notablyBrexitandTrumpism.

Fromanationalwelfarestatetomulticulturalmarketeconomy:

ThecaseofDenmark,1870-2011

NielsKærgård,UniversityofCopenhagen,[email protected]

AbstractTheDanishwelfarestatehasbeencharacterizedbyuniversality–allcitizenshavetherighttofree

medicalhelp,freehospital,freeeducationandapensionevenwithoutsavingandemploymenton

thelabourmarket.Thegeneralsocialsafetylevelispublicarrangedandhigh.Allthisisfinancedby

taxesandthismeansthatprogressiveincometaxishigh.Thismodelcanbeseenasratherideal

consideredinaRawlsianperspective;thestrongshouldersarecarryingtheheavyburdensandthe

possibilitiesforweakpersonsarehigherthaninmostothercountries.

Ithasoftenbeenarguedthatsuchawelfarestateisasocialdemocraticproject,andno

doubtthesocialdemocraticpartyhasplayedanimportantroleinthedevelopment.Buttwo

otherforcesseemtohaveplayedaroleintheearlystagesofthedevelopmentinthe1870s.

Thefirstisthechangeineconomictheoryfromclassicaltoneoclassicaleconomics;thiswas

achangefromMalthus’andRicardo’sironlawofwagestoanewtheorywhichacceptedthe

possibilityofbetterconditionsforthepoorestpartofthepopulation.Thesecondisa

numberofChristianparticipantsinthepublicdebate,whoarguedforamorehumanesocial

policyandforahigherdegreeofprotectionoftheweakmembersofthesociety.

Butthecreationofthewelfarestatewasnotmainlyamatterofattitudeandideology.It

seemsanecessaryfoundationforthedevelopmentthatDenmarkfrom1864,wherethe

GermanpartsoftheKingdomwerelostinawar,untilthe1970swasaveryhomogeneous

society;ethnical,linguisticandreligious.AlmostallinthecountrywereDanishspeaking

inhabitantswithhistoricalrootsgoingalmostbacktotheVikings.99percentofthe

populationwereuntilafterWorldWarIImemberofthepublicEvangelical-Lutheranchurch.

Itwasinfactinalldimensionsaveryhomogeneoussocietywithaveryhighdegreeof

internalsolidarity.

Itseemsasiftheglobalisationsincethe1970shasthreatenedthiswelfaresystem.The

immigrationofforeignworkersandrefugeeshascreatedconsiderableminoritiesofverydifferent

ethnic,religiousandlinguisticgroups.Thesolidarityamongthedifferentgroupsinthesociety

seemsbecauseofthisweakened.Theweakestpeoplearenowoftenfromtheethnicminorities.

Minimalwagesresultinunemploymentamongtheunskilledworkers,andthestrongestandbest

educatedpeoplehavethepossibilitiesofescapingthehightaxesbytakingjobsinlow-tax

countries.Globalisationispositivefortheeducatedhigh-incomeclassesandnegativeforthe

unskilled.Newpopulisticpoliticalpartieshavesuccessamongthenormallysocialdemocratic

unskilledworkers.

Theconclusionoftheinvestigationisthatglobalisationandmulticulturalismhavecreated

difficultiesforthehomogeneous,universalwelfarestateoftheScandinaviantype,butthe

problemsarenotcreatedbyvalues,religionandattitudesbutmainlybypureeconomicforcesand

classconflicts.

TheDawesBonds:SelectiveDefaultandInternationalTrade

OlivierAccominotti§LondonSchoolofEconomics

PhilippKessler¨UniversityofMannheim

KimOosterlinckbUniversitéLibredeBruxelles

Abstract

Trade sanctions are often presented as a powerfulmechanism to force sovereigns to

reimbursetheirdebtsbuttheireffectivenessishardtoestablishempirically.Thispaper

reliesonauniquehistoricalexample,Germany’sexternaldefaultof1933and1934, in

order to analyze the relationship between sovereign defaults and international trade.

After defaulting on its external loans, the German government negotiated separate

settlements with various creditor countries that differed in the degree to which they

sanctionedtradewithGermany.ThesettlementreachedbetweenGermanyandBritain

wasthemostfavorableforbilateraltrade,whileotherEuropeancreditorcountriesopted

forclearingagreementsthatturnedouttohaveanegativeeffectontrade.Usingdaily

prices of the sterling Dawes bonds traded in Amsterdam, London, Paris and Zurich

between1930and1938weassesshowmarketparticipantsvaluedthesedifferentdeals.

Wefindthatthereisevidenceofmarketsegmentationasofmid-1934asinvestorsstarted

§ London School of Economics, Department of Economic History, Houghton Street, London WC2A 2AE, United Kingdom; Email: [email protected] ¨Corresponding author: University of Mannheim, Department of Economics (GESS), D-68131 Mannheim, Germany, Email: [email protected] b Université Libre de Bruxelles, SBS-EM, 50 av. Roosevelt, CP 114/03, 1050 Brussels, Belgium; Email: [email protected].

expectingdifferential treatmentof creditors. Fromthispointonwards thepriceof the

bondinLondonwaspersistentlyhigherthanonanyothermarket,evenduringaninitial

periodwhentheeffectivecash-flowsfromthebondwerestillthesameinallmarkets.This

meansthatinvestorsdidnotperceivetradesanctionsandclearingsystemsasusefultools

toobtainrepaymentfromGermany.Bycontrast,theyexpectedthatcreditorcountries

which had granted Germany favorable trade conditions would obtain better debt

settlementtermsthanothers.Therefore,guaranteeingthedefaultingcountryacertain

capacitytoearnforeignexchangebyincreasingbilateraltradewasperceivedasaviable

solution to obtain a favorable debt settlement. However, this view stands in sharp

contrastwiththetradesanctionsapproachintheliterature.Infact,creditorcountriesat

the time actually had little incentives to sanction Germany with trade restrictions.

Moreover, the clearing agreements created distributional struggles within creditor

countries,whichtheGermangovernmentexploitedinordertoplayoutdifferentgroups

ofcreditorsagainsteachotherandminimizeitsdebtburden.Thisstrategywascrucially

facilitatedbyageneraltrendtowardsinternationalbilateralismthatstifledattemptsto

maintainaunitedcreditorfrontinthefirstplace.

TheMortalityEffectsofLocalBoardsofHealthinEngland,1848-70

MaxwellKiniria

CornellUniversity

Abstract

ThePublicHealthActof1848wasEngland'sfirstattemptatsystematicsanitationimprovement.

Between 1848 and 1870, it oversaw the adoption of more than 600 local boards of health

(comprisingroughlyonequarteroftheEnglishpopulation),eachofwhichitendowedwiththe

powertoimproveinfrastructure,providestreetcleaningservices,regulatenewconstruction,tax

itsinhabitants,andborrowfromtheExchequer.Sincethejurisdictionsoflocalboardswerenot

coterminous withmost other administrative, statistical, or natural boundaries, themortality

effects of local boards have been largely unexplored. In this paper, I introduce a new panel

datasetthatmatchesthejurisdictionsoflocalboardsofhealthtothejurisdictionsofpoorlaw

unions.Ithenleveragevariationinboththetimingandextentofboardadoptionacrossunions

inordertoestimatethecumulativeeffectoflocalboardsonmortalityrates1,2,3,and4years

afteradoption.Myestimatessuggestthatlocalboardsreducedmortalityby14.2percentafter

four years. Accounting for incomplete take-up, this amounts to a 3.7 percent reduction in

mortality by 1870 in Englandas awhole. I calculate that local boards "saved" approximately

225,000livesover23years,nearlytentimesthenumberofBritishcasualtiesduringtheCrimean

War.

500YearsofUrbanRents,HousingQualityandAffordabilityinEurope

PietEichholtz(MaastrichtUniversity)

MatthijsKorevaar(MaastrichtUniversity)ThiesLindental(UniversityofCambridge)

Abstract

Housing affordability remains a significant concern in modern cities. Despite a century ofgovernment interference in housing markets, few information is available on how housingaffordability has evolved during this period. At the same time,many historical studies haveanalysedthecostofhousinginearliercenturies.Unfortunately,anoverviewofthesestudiesismissingandthewiderangeofusedmethodologiesmakesitdifficultdrawcomparisonsamongthem.To fill these gaps in the literature, this paper studies urban rents, housing quality, andaffordability in seven European cities; Amsterdam, London, Paris and the four Belgian citiesAntwerp,Bruges,BrusselsandGhent;allthewayfrom1500tothepresent.Wecompileexistinghistoricalstudiesandourownarchivaldatacollectionintoadatabaseofaroundaquartermillionofhousingrents,whichweusetoconstructquality-controlledrentindicesforeachcity.Aftercombining these indices with contemporary statistics on rental prices, we compare them todevelopments inwages and the prices of other consumption goods, using both existing andnewly-constructed indices.Last,wedecomposehousingexpenditures inamarketcomponentandaqualitycomponent,inordertomeasurelong-runchangesin(implied)housingquality.TheindicesrevealthatrealhousingrentsinEuropeancitieshavedevelopedsimilarlyinthelongrun,butreflectdifferencesinlocaleconomicandpoliticalconditionsintheshorterrun.Whilerealrentshaveincreasedinmostcities,long-rungrowthinrealrentsislimited.Atthesametime,wage growth has outpaced growth in quality-controlledmarket rents, implying that housingaffordability has improved significantly, particularly during the 20th century. In addition, wesuggestthattheshareofincomespendon(urban)housingmighthavebeenhigherandmorevariablethanassumedinexistingcost-of-livingstudies.However,inmorerecenterastheincreasedshareofincomethatisspendonhousingdoesnotmatchthesignificantimprovementsinrentalaffordability.Tounderstandthesedifferences,itisessentialtolookatmeasuresofhousingquality.Ourindicesrevealthatimpliedhousingqualityhas increasedmanifold,andwasalreadyexpandingasearlyasthe16thcentury.Althoughthetimingoftheseupgradesvariesacrosscities,inthelongrunimpliedhousingqualityhasincreasedbysimilaramountsineachcity.Thisalsosuggeststhatstudieswhichcouldnotcontrolforhousingqualitylikelysignificantlyoverstatedgrowthinthecostofhousing.Ourstudyshowsthatinthelongrun,mostincreasesinhousingexpenditurescanbeattributedtoincreasinghousingquality,ratherthanrisingrealmarketrents.

IndustrializationasaDeskillingProcess?SteamEnginesandHumanCapitalinXIXthCenturyFrance

ClaudeDiebolt,CharlotteLeChapelain,Audrey-RoseMenard

Abstract

The relationship between technological change and human capital is ambiguous. In the

contemporaryperiod,aconsensussurroundstheideathattechnologicalchangeisskill-biased,that

itfavorsskilledoverunskilledlabor.Paradoxically,theindustrializationprocessoftheXVIIIth-XIXth

centuriesisusuallyregardedasadeskillingprocess.Theviewthathasprevaileduntilveryrecently

isthat,inthefirststageofindustrialization,technologicaladvancesincreasesrelativedemandfor

unskilledlaborandthereforethattechnologicalinnovationandskillswerenotcomplementary(see,

forinstance,NicholasandNicholas1992,Mokyr1993,Mitch1999).AccordingtoGoldinandKatz

(1998),thecomplementaritytookplaceintheearlyXXthcenturywhenthetechnologicalshiftfrom

steampowertoelectricityoccurred.Theviewthattheprocessofindustrialization–inthetimeof

the steam machine– was deskilling has recently prompted renewed attention. It gives rise to

contrasting results. Feldman and Van der Beek (2016) claim that technological progress was

conducive to skills acquisition in eighteenth century England by showing that the number of

apprentices and their share in the cohort of the fifteen year-olds increased in response to

inventions.FranckandGalor’s(2016)analysisalsosupportsthe‘skill-biasedtechnologicalchange’

hypothesisfortheFrenchcaseintheearlynineteenthcentury.ForDePleijt,NuvolariandWeisdorf

(2016), the effect of industrialization on human capital ismixed. They show that technological

adoptionwasskilldemandingsinceitimprovedtheaverageskillsofworkers.Buttheyalsohighlight

that adopting new technologies was not conducive to elementary education (approximated by

literacy rates and enrolment rates). Contrastingly, De Pleijt andWeisdorf (2017) show a large

decreaseinaverageskillsinagricultureandindustryfromtheendofthesixteenthcenturytothe

beginningofthenineteenthcenturyinEngland.Theyclaimthatdeskillinggloballyoccurredwith

technologicalprogress,despiteamodestincreaseintheshareof‘high-quality’workers.Thisfinding

gives support to the view, alreadydefendedbyMokyr (1990, 2005) and,more recently for the

Frenchcase,bySquicciariniandVoigtländer(2015),thatupper-tailknowledgeplayedaprominent

roleinearlyindustrialization.

Our paper contributes to this open debate by providing analysis of the effects of the French

industrializationprocessonhumancapitalaccumulationthroughoutthenineteenthcentury.The

noveltyoftheresearchistwofold:(i)weexplorethedeskillinghypothesisnotonlyfortheveryfirst

phase of the French industrialization, but also for the subsequent stages of the process by

implementingapanelanalysis;(ii)weintroduceadisaggregatedhumancapitalperspectivesoasto

examinechangesinskillsdemandatthesedifferentstages.

TheGeographicalOriginsofEarlyStateFormation

LuisitoBertinelli(UniversityofLuxembourg)

AnastasiaLitina(UniversityofIoanninaandUniversityofLuxembourg)

Abstract

This researchadvances thehypothesis that inearlystagesofdevelopment, theemergenceof

stateswasexpeditedinmorediversegeographicalenvironments.Ahighdegreeoflandvariability

accentuated the incentives to develop social, political and physical infrastructure that could

facilitate interregional interaction. To explore the hypothesis the analysis exploits exogenous

sourcesofvariationinlandvariabilityacrossvirtualcountries.Forthevirtualcountriesanalysis,a

novelmeasureofstatehoodfortheperiod1-2000CEisconstructedthatisavailableatthegrid

level. The research establishes that the advent of statehood was expedited in regions

characterizedbyahigherdegreeofvariabilityinlandsuitabilityforagriculture.

ThreatofRevolution,PeasantMovementandRedistribution:TheColombianCase1957-1985

MariadelPilarLopez-Uribe

Abstract

Iexaminethelinkbetweenademocraticreformthatempoweredthepeasantsandbothtypesofredistribution,broadandtargeted,andstudyhoweffectivethisreformwasatavoidingapotentialrevolutioninthecontextoftheNationalpeasantmovement(ANUC)andthethreatof a Communist revolution in Colombia during 1957-1985. Using a new data set of theColombianruralsectorandtheDiffinDiffandIVstrategies,Iexploitthevariationatmunicipallevelofthetimingofobtaininglegalentitlementofthepeasantmovementasamechanismtoempoweringthepeasantrywhenthereisathreatofrevolutioncomingfromthisgroup.Ifindthatthisreformdidnotleadtoahigherredistributiontowardsthepeasantryasagroupsincelandtaxrevenuesandsocialexpendituredecreased.However,itledtoanincreaseintargetedredistribution:giventhesizeofthepeasantry,themovementwasamechanismtorestraintheCommunistthreatbyco-optingandgivingbenefitstopeasantleaders.Inthoseplaceswherethepeasantswereempowered,theelitedistributedprivategoodssuchasjobsandlandstotheirleaders.Theyexperiencedanincreaseinbureaucraticexpenditure,inthenumber of employees in administrative jobs andmore public lands were granted to thepeasant leaders. Finally, I find that the empowerment exacerbated the potential peasantrevolution(landinvasionsduringtheyearsfollowingtheendofgovernmentsupport(1972-1978)andtherebelactivityoftheRevolutionaryArmedForcesofColombiaduringthefirststageofconflict(1974-1985))butempowermentandco-optationappeasedit.

GenderWageInequalityinWesternEurope,1400-1800

AlexandraM.dePleijt,

NuffieldCollegeOxfordandUtrechtUniversity

JanLuitenvanZanden,

UtrechtUniversity

Abstract

Oneof the explanations for theparticular pre-industrial growthof regions such asHolland and

Englandisthe“EuropeanMarriagePattern”(EMP)–i.e.inthisparticularregionoftheworldwomen

marriedrelativelylate,therewasasmallspousalagegap,andahighshareofsinglewomen(cf.

Hajnal1965).Followingthe ideasdevelopedbydeMoorandvanZanden(2010) this favourable

demographicregimeemergedintheNorthSearegioninthelateMedievalperiodasaresultofthe

preachingoftheCatholicChurchpromotingconsensusbasedmarriage,theriseofwell-functioning

labourmarkets, and institutions of property transfers between parents and their offspring that

promotedwagelabourbywomen.

Acentralpartofthehypothesisstressestheimportanceofwagelabourbywomen:inordertobring

aboutthefavourableconditionsoftheEMP,womenshouldhavehadaccesstothelabourmarket

andhaveearnedadecentwage.Thismaytranslate itself inasmallergenderwagegapandthe

possibilitythatwomenearntheirownlivingandhavetheoptiontoremainsingle.

Butsofarlittleisknownabouthowmuchwomenearnedinthepast.Inthispaperwetherefore

provideevidenceonthewagesofunskilledwomenfor7Europeancountriesbetween1300and

1800,incorporatingamongstothersthepaperbyHumphriesandWeisdorf(2015)onfemalewages

inEngland.Inordertokeepourfemalewageseriescomparabletopreviousworkonmalewages

(e.g.Allen2001),wefocusonunskilledoccupationsandondailywagesonly.

OurdatasetshowsthatthegenderwagegapwasrelativelyhighinCentralandSouthernEurope:In

ItalyandSpain(andFrance),thegapwasca.50%aftertheBlackDeath.IntheNorthSeaRegion

(England,HollandandFlanders,Sweden)quitetheoppositewastrue:thedailywagesofunskilled

womenwereca.80-90%ofthoseofmen.However,fromthe16thcenturyonwardsthegenderwage

gapincreasedrapidly,andinEnglandinthe18thcentury,forexample,womenearnedlessthanhalf

thewageofmen.

Weresinglewomenabletogenerateenoughincometosurvive?Wealsohaveestimatedhowmany

daysofworkwereneededforwomentoearnthebarebonesbasket(seeAllenandWeisdorf2011).

The picture that emerges from this is that therewas a ‘golden age of labour’ in the countries

bordering theNorthSea.Before theBlackDeath80 to100daysofworkwere required for the

barebonesbasket,whereasthishaddeclinedtoonly40daysofworkafterthearrivaloftheplague.

After1500,whenthepopulationlevelclimbedbacktopre-plaguelevels,thisagainincreasedto80

to100days.

OverallouranalysisshowsthatwomenweremuchmoremarginalatthelabourmarketinSouthern

andCentralEuropethanintheNorthernandWesternpartsofEurope,confirmingtheGirlpower-

hypothesis.

Government-madebankdistress:

Industrializationpoliciesandthe1899-1902Russianfinancialcrisis

NikitaLychakov

Abstract

Canrealeconomypolicymistakesleadtobankdistress?Inthe1890s,theRussianEmpirewas

undergoingrapidstate-ledindustrialization.Growthwaspropelledbyforeigncapitalinflowand

government procurement of private sector industrial output. Concurrently, state policies

stimulated industrialiststoexpandtheiroperationsand incentivized,althoughnotcompelled,

commercialbankstofinanceindustry.In1899,theinflowofforeigncapitalfellsharply,initiating

afinancialandindustrialcrisis.Thisresultedinarapidstockmarketdecline,areductioninheavy

industryoutput,andwidespreadcorporatebankruptcies–togetherculminatinginoverwhelming

lossesamongbanks.Becausebankssuppliedoverhalfofallfinancingreceivedbytheindustrial

sector,bankingdistressputthesuccessesofthe1890satstake.

Theaimofmypaperistouncoverwhether,andtowhatextentgovernmentpoliciescontributed

tobanklossesinthecrisisof1899-1902.Theimportanceofthisenquirycomesfromthefactthat

the influence of the state on a banking system is often immense and can be negative. As a

consequence of the 2007-2008 financial crisis, the current policy debate has focused on

tougheningbankregulationandoversight.Nevertheless,byconcentratingonbankingpolicies,it

iseasytoforgetthatpoliciesaimedatthedevelopmentofnon-financialsectorscanalsoleadto

bankfailures.

Inorder todetermine thepassageofdistress fromthestate to thebankingsector, I capture

personalconnections,ormoreformally interlocks,betweenbanks,governmentorganizations,

andnon-financialcompanies.Inparticular,Ihavecollectedanddigitizedtwotypesofdata:(1)

namesofgovernmentofficials,boardmembersatnon-financialcompanies,andboardmembers

atbanks,and(2)bankfinancialstatements.Collectively,Iidentify416bankers,3,378corporate

boardmembers,and7,596governmentofficials.

Next I determine how the presence of government and industrial connections affected bank

performance.Bankdistressismeasuredintheformof(1)netlossesbankssustainedontheir

investmentportfoliosovertheentirecrisisperiod,andintheformof(2)thepercentagechange

inthebanksharepricefromthemaximumtotheminimumleveloverthefirstyearofthecrisis.

Ifindthatbanksthatexperiencedgreaterdistressinthecrisishadmorepersonalconnectionsto

governmentofficialswhowereclose to theepicenterofpolicymaking.Theconclusion is that

banks that had been influenced most by the industrialization policies exposed themselves

financiallytoheavyindustrialcompaniesand,asaresult,experiencedgreaterlossesduringthe

crisis.

Moreover,banksthatsufferedmoreacutedistresshadmorepersonaltiestocompaniesthat

were highly stimulated by state policies to expand production, namely heavy industrial

companies.Theinterpretationisthatbanksthatsufferedgreaterlosseshadgreaterexposure,

eitherviadirectloanfinancingorsecuritiesunderwriting,tocompaniesmoststimulatedbystate

policies. Taken together, these two perspectives point to a destabilizing impact of national

developmentpoliciesonbankperformanceandultimatelyonindustryoutput.

TheReichsbank,centralbankingcompetitionandmonetarystability

inGermanyin1876-90

OusmèneJacquesMandeng

LondonSchoolofEconomics,EconomicHistoryDepartment

Abstract:

Germany’smonetaryandcentralbankreformsin1871-75establishedoneofthemost

successfulmonetaryunionsofthenineteenthcenturyamidhigheconomicgrowthand

stablebanknoteissuance.Itexhibiteduniquefeatureswiththefoundationofamixed

centralbankingsystemwiththeGermanImperialBank(Reichsbank),predecessorofthe

BundesbankandEuropeanCentralBank(ECB),atfederallevelandcontinuationofvarious

privatebanksofissue(Privatnotenbanken)atregionallevel.Thereformscomprised

adoptionofacurrencyunionandthegoldstandardin1871-73.The1875bankact

(Bankgesetz)introducedstrictregulationfortheoperationsoftheReichsbankand

Privatnotenbanken,uniformbanknotereserverequirementsandissuanceceilingsamida

proliferationofPrivatnotenbanken,rapidexpansionofnotesincirculationandpoorminting

standards.

Themixedcentralbankingsystemaimedtoinducethroughinter-institutionalcompetition—

preservationandexpansionofmarketsharesinlending—moreconservativebanknote

issuancebehaviour.Thenotionofcentralbankingcompetitionasfundamentaltothe

architectureofthecentralbankingsystemhasbeengenerallydiscarded.Reformintentand

impactonthecentralbankingsystemhaverarelybeenanalysed.

Thecontributionofthepaperistodemonstrateandteststatisticallytheimportanceof

competitionamongtheReichsbankandthePrivatnotenbankenforthestabilityconditions

ofthecentralbankingsystemin1876-90.Thepaperoffersanewmonthlydatasetofmain

balancesheetitemsoftheReichsbankandthePrivatnotenbankenfor1876-90.Thesedata

allowadetailedstatisticalanalysisofthecentralbankoperationsduringtheearlyyearsof

thebankact.Thepaperarguesthatcompetitionplayedafundamentalroletoaddress

moderncentralbankingconcernsofcredibilityandincentivesinmonetarypolicyand

strategicdelegation.Toanalysecompetition,thepaperusesacompetitivereactions

approachfromindustrialorganisation.Withemphasisonthedecentralisedreformelements

thepaperaimstoofferamorecompleteassessmentofreformintentandoutcome,assess

whetherreformintentwasachievedandthereformwaseffective.Thestudyintendsto

differentiateGermanyfromdominantperiodcentralbankingtrendsandserveasa

reminderofalternativeapproachestocentralbankinginmonetaryunionsduringthe

formativestagesofmoderncentralbanking.

Thepaperusesastructuralvector-auto-regressionmodelwithexogenousvariablesto

analysethedynamicinteractionsamongtheReichsbankandPrivatnotenbanken.

CompetitionistestedthroughtheresponsesofthePrivatnotenbankentomonetary

impulsesfromtheReichsbankwherecompetitionisassumedtoexistwheretheresponses

aresignificant.Stabilisationisassessedthroughthepatternanddurationoftheresponses

ofthePrivatnotenbankentomonetaryimpulsesfromtheReichsbankwherestabilityisseen

asconsistentwitharapidreversionoftheresponsestomonetaryimpulses.Theresultsare

supportiveofthepresenceofandstabilisingimpactfromcompetition.

TheanalysisillustratesthatnineteenthcenturyGermanyoffersanimportantalternative

approachtocentralbankinginmonetaryunionsandthatdecentralisedcentralbanking

systemscanbestable.Germanyhadshownthatmonetaryunionmustnotmeanasingle

centralbank.

OfMiceandMerchants:TradeandGrowthintheIronAge

StephanErnstMaurer,Jörn-SteffenPischke,FerdinandRauch

Abstract

Weinvestigatetowhatdegreetradingopportunitiesaffecteconomicdevelopment.Thecausalconnectionbetweentradeanddevelopmentistypicallyobscuredbyreversecausality,theendogenouslocationofeconomicactivities,andconfoundingfactorslikeinstitutions.Inordertocircumventmanyoftheseproblems,wefocusononeoftheearliesttradeexpansionsinpre-history:thesystematiccrossingofopenseasintheMediterraneanatthetimeofthePhoenicians.Werelatetradingopportunities,whichwecapturethroughtheconnectednessofpointsalongthecoast,toearlydevelopmentasmeasuredbythepresenceofarchaeologicalsites.WefindthatlocationaladvantagesforseatradematterforthefoundationofIronAgecitiesandsettlements,andthushelpedshapethedevelopmentoftheMediterraneanregion,andtheworld.Alocationwithmorepotentialtradingpartnersshouldhaveanadvantageiftradeisimportantfordevelopment.Aslongasshipssailmainlyclosetothecoast,theparticularshapeofacoastdoesnotinfluencehowmanyneighboringpointscanbereachedfromastartinglocationwithinacertaindistance.However,oncesailorsbegantocrossopenseas,coastalgeographybecomesimportant:asailorstartingatacoastalstretchwheretheseaisconvexcanreachmoredestinationswithinacertaindistancethanonestartingatastretchofconcavecoast.Thelocationofislandsalsomatters.WecapturethesegeographicdifferencesbydividingtheMediterraneancoastintogridcells,andcalculatinghowmanyothercellscanbereachedwithinacertaindistance.Werelateourmeasureofconnectivitytothenumberofarchaeologicalsitesfoundnearanyparticularcoastalgridpoint.Thisisourproxyforeconomicdevelopment.Itisbasedontheassumptionthatmorehumaneconomicactivityleadstomoresettlementsandparticularlytownsandcities.Whiletheseexpandandmultiply,therearemoretracesinthearchaeologicalrecord.WefindapronouncedrelationshipbetweenconnectivityanddevelopmentinourdatasetfortheIronAgearound750BC,whenthePhoenicianshadbeguntosystematicallytraversetheopensea,usingvariousdifferentdatasourcesforsites.Wefindaweakerandlessconsistentrelationshipbetweenconnectivityandsitesforearlierperiods.Thisisconsistentwiththeideathatearliervoyagesoccurred,maybeatintermediatedistances,atsomefrequencyalreadyduringtheBronzeAge.Ourbestevidencesuggeststhattherelationshipbetweencoastalgeographyandsettlementdensity,onceestablishedintheIronAge,persiststhroughtheclassicalperiod.Thisisconsistentwithalargeliteratureineconomicgeographyonthepersistenceofcitylocations.WhileourmainresultspertaintotheMediterranean,wherewehavegoodinformationonarchaeologicalsites,wealsocorroborateourfindingsataworldscaleusingpopulationdatafor1AD.

EstimatingtheImpactofLocalConditionsonAssetPreferencesinAdulthood

ErinMcGuireUniversityofArizona

Abstract

Thefinancialcrisisof2008renewedresearchers’interestinthelong-runimpactofeconomicshocksonindividualdecision-making.Currentevidencesuggeststhatexperiencingavolatileordepressedeconomyhasasignificantimpactonlong-termhealth,humancapitalattainment,careeroutcomes,andinvestment.However,theresultsinmanyofthesestudiesrelyonmeasuresofeconomicconditionsusingnationalaggregates.Thismakesitdifficulttodifferentiatebirthcohorteffectsandlifecycleeffectsfromtheimpactofeconomicexperiences.Inthisarticle,Iusestate-levelvariationineconomicconditionsoverthecourseofthe20thcenturytoinvestigatetheimpactofeconomicdownturnsduringchildhoodoninvestmentdecisionsinadulthood.Theresearchdesignenablesmetocontrolforlocation,year,birthyear,andlifecycleeffectssimultaneously.Ialsoinvestigatewhetherobservationsoftheeconomyataparticularagerangeinchildhoodmattermorethanatotherpoints.Ifindthatthereisvariationininvestmentdecisionswithinbirthcohortsbasedonvariationineconomicconditionsinthestateinwhichtheygrewupandthatconditionsduringlatechildhood(age13-18)mattermorethanconditionsduringtherestofchildhood.

Duringanindividual’steenyears,mypreliminaryresultsshowthatthemagnitudeoftheimpactoftheDepressiononlaterrisk-takingissubstantive.Statemacroeconomicconditionsleadtolowerinvestmentinstocksinadulthood(controllingforadultincome).Anincreaseof$1,000inaveragestateincomeduringtheteenageyearswillincreasethepercentageofliquidassetsheldinstocksbyabout8percentagepointsaftercontrollingfornationaltrends,regionalattitudes,andlifecyclefluctuationsinassetallocation.Individualswhobegintheirlivesbyobservinganeconomicdownturnremainpessimisticandriskaverseoverthecourseoftheirlifetime.Ifindthatindividualsputmoreweightonexperiencesfromtheirteenageyearsthanearlierperiodsofchildhood,butearlierexperiencesmayholdsomepositiveweightindecision-making.Thischangeinattitudecontinuestoretirement,asmyestimatesfromtheHealthandRetirementStudysamplearesimilartothosefromthePanelStudyofIncomeDynamicsandSurveyofIncomeandProgramParticipation.Toinvestigatewhetherotherinvestmentpreferencesareimpacted,Ialsoestimatetheimpactonbusinessownershipandhomeownership.Thesearesomeofthemostsignificantinvestmentsthatindividualsmakeoverthecourseoftheirlives.Ifindasignificanteffectonbusinessownershipinmiddleage,butnotforpeoplewhoareclosetoretirement.Asonegetsolderandhasmoreexperience,itisperceivedaslessriskytoopenabusiness.Surprisingly,homeownershipratesarenotaffectedbystateincomepercapitaduringchildhood.However,Idofindthathomeequityinvestmentandtimingofhomepurchasesareimpactedbyconditionsduringchildhood.

MorethanOne-HundredYearsofImprovementsinLivingStandards:

TheCaseofColombia

JulianaJaramillo-Echeverrijjaramec@banrep.gov.coCentralBankofColombia

[email protected]

MaríaTeresaRamí[email protected]

Abstract

Thepurposeofthispaperistoexaminethelong-termtrendsobservedinthestandardoflivingoftheColombianpopulationduringthepastonehundredyears. Inparticular,thispaper provides evidence of how well-being evolved over time, focusing specifically onhealth. Following the work of Prados de la Escosura (2014 and 2015), we construct ahistoricalindexofhumandevelopmentforColombia(HIHDC)bygenderforthe19thand20th centuries. We find that there were no major advances in the index during thenineteenthcentury,probablyduetothestagnationofColombia’sGDPpercapitainthatcenturyasaresultofthelackofdynamisminexports.Onthecontrary,significantadvancesinallcomponentsoftheHIHDCwereseenduringthetwentiethcentury,especiallyinthesecondhalf.Progresswasmadeespeciallyonincome,education,andhealth.Duringthefirsthalfofthecentury,improvementsinthequalityoflifeweremainlydrivenbyhigherper capita income, while improvements after the 1950s were driven by greater publicinvestments, as in the case of education and health. It is worth highlighting thatimprovements inwomen'sHIHDCwere substantial in the last sixtyyears,mainlydue tolargegainsinlifeexpectancyandtoeducationalachievements.Next,wefocusontheanalysisofhealthachievementsthathavetakenplaceinthelastonehundred years, since health is one of the components of theHIHDC that has been lessstudiedinthecaseofColombia.Tothisend,weconstructanewdatasetusingstatisticsreportedbytheColombiangovernment,whichincludedannualinformationonthemaindiseases and causes of mortality during the period 1916-2014 disaggregated bydepartments(themainsubnationalterritorialunits).Thedatashowsthatthepercentageof deaths from tuberculosis, pneumonia, and gastrointestinal diseases decreasedsignificantly throughout the century. On the contrary, deaths due to cancer and heartdiseaseshaveincreasedconsiderablyinrecentdecades.Bygender,somedifferencesarelikelytoexistintheprevalenceofcausesofdeaths.Forexample,therearedifferencesinchronicdiseasessuchascancerorcardiovasculardiseases,wheregeneticsplaysamajorroleincontrasttoinfectiousdiseases.Resultsfromdifference-in-differencemodelsshowthatthedeclineinmortalityratesandin the prevalence of somewaterborne diseases was related with the expansion in theprovision of public goods. Particularly, we find that that advances in the provision ofseweragesystemsaccountedformorethan14%ofthedeclineingastrointestinaldeaths,

andthataqueductsreduceditby9%.Asexpected,theeffectongastrointestinaldiseasemortalityratesfromwaterandsewerageaccessislargerthantheoneontotalmortalityrateandrespiratorydiseasemortalityespeciallyinthecaseofsewerageservices.

CasualtiesoftheColdWar:Fallout,IrradiatedDairy,

andtheMortalityEffectsofNuclearTesting

KeithMeyersUniversityofArizona

[email protected]

Abstract

DuringtheColdWar,theUnitedStatesdetonatedoveronethousandatomicweapons.Priorto1963,manyofthesenucleartestswereconductedabovegroundandreleasedtremendousamountsofradioactivepollutionintotheenvironment.ThedomesticliteraturestudyingtheeffectsofthisradioactivefallouthasfocusedprimarilyuponpersonslivinginthefewcountiessurroundingtheNevadaTestSite(NTS).Thesestudies,however,havenotquantifiedthefullgeographicortemporalextentoftheharmcausedbythesetests.ThispapercombinesanewdatasetmeasuringannualcountylevelfalloutpatternsforthecontinentalU.S.withpublichealthdatatoanalyzethehealtheffectsofatmosphericnucleartestingattheNTS.Falloutexposuremeasuredatthecountylevelresultedinpersistentandsubstantialincreasesingrossmortality.Thecumulativedeathtollattributabletonucleartestingis8to10timeslargerthanpreviousestimates.TheempiricalresultsofthispapersuggestthatnucleartestingcontributedtohundredsofthousandsofprematuredeathsintheUnitedStatesbetween1951and1972.Thesocialcostsofthesedeathsrangebetween$400billiontoover$3.8trilliondollarsin2016$.Theselossesdwarfthe$2billioninpaymentstheFederalGovernmenthadmadetodomesticvictimsofnucleartestingthroughtheRadiationExposureCompensationAct.ThecontemporaryscientificandmedicalliteraturefocusesontheeffectsofatmospherictestingonpopulationsresidinginDownwindcountiesinArizona,Nevada,andUtah.Counterintuitively,theareaswherefallouthadthelargestimpactonthecrudedeathratewasnotintheregionsurroundingthetestsite,butratherinareaswithmoderatelevelsofradioactivefalloutdepositionintheinteriorofthecountry.Duetopasturingpractices,largequantitiesoffalloutwoundupinlocaldairysuppliesintheseregionsbutnotintheDownwindregions.Becauseofthisexposuremechanism,depositionmeasuresforthemostirradiatedareasserveasalessaccurateproxyforexposurethandepositionmeasuresforlessaridregionsofthecountry.4JELclassification:I18;N32;Q50Keywords:NuclearTesting;EnvironmentalQuality;Pollution;PublicHealth

4ThismaterialisbasedinpartuponworksupportedbytheNationalScienceFoundationunderGrantNumberSES1658749.Anyopinions,findings,andconclusionsorrecommendationsexpressedinthismaterialarethoseoftheauthor(s)anddonotnecessarilyreflecttheviewsoftheNationalScienceFoundation.AdditionalfundingwasalsoprovidedbytheEconomicHistoryAssociation.Theresultsreportedinthispaperarepreliminary.ThankstoPriceFishback,DerekLemoine,AshleyLanger,JessamynSchaller,GarySolon,andCihanArtuncforfeedback,dataandsupport.AdditionalthankstoAndreBouville,StevenSimonandtheNationalCancerInstitutefortheirhelpprovidingfalloutdepositionrecords.

UncertaintyandHyperinflation:

EuropeanInflationDynamicsafterWorldWarI

Abstract

Weexamine inflationdynamics in Europe immediately after the endofWorldWar I.We

analyzehowpolicyuncertainty influencedcommitments to credible fiscalpaths, andhow

pronounceduncertaintyinasubsetofEuropeancountriespushedthemintohyperinflation

shortlyaftertheendofthewar.Ourcontributionistoprovideanewempiricalmethodology

foranalyzingwhyhyperinflationisunleashedinsomesituationsbutnotothers,andthento

testthisinthecanonicalsettingofpost-WorldWarIEurope.Ourmethodologyisgeneral–

sinceitcanbeappliedacrosscountriestodistinguishtheexantelikelihoodofsubsequently

experiencinghyperinflation–aswellasspecific– inthat itanyonecountry’s likelihoodof

experiencinghyperinflationisbasedoncountry-specific“news.”Ourmethodologyconstructs

ameasureofpolicyuncertaintyusinganewdatasetofhigh-frequencyexchangeratesfor

tenEuropeancountries.Fromthesedailydata,weconstructcountry-specificmeasuresof

uncertaintyusingthemonthly,realizedvolatility(RV).

AlthoughrealizedvolatilitymeasureswerehighacrossEuropeafterWorldWarI,weshow

that theywereparticularlypronounced inGermany,Austria,Poland,andHungary (GAPH)

priortotheirhyperinflations.Forexample,Germany’sRVwasseveralhundredtimeslarger

than that of Holland. Using narrative collected from contemporary news sources and

governmentpublications,we then show that thehighdegreeofmeasureduncertainty in

GAPH was correlated with weak fiscal capacity, protracted political negotiations over

reparationspayments,andunresolveddisputesoverbordersandtheapportionmentofthe

JoseA.Lopez KrisJamesMitchener

FederalReserveBankofSanFrancisco SantaClaraUniversity

CAGE,CEPR,CES-ifo&NBER

Austro-HungarianImperialdebt.Bycontrast,otherpartsofEuropesawspikesinRVthatare

identifiedwithpolicyuncertainty,butthesewereconsiderablysmalleraswasthe levelof

uncertainty.

Ourmeasure of uncertainty appears to capture the inability of policymakers in GAPH to

formulate and commit to credible fiscal policies, and thus suggests a causal linkbetween

uncertainty and inflation dynamics. To test for causality more formally, we embed our

measureofuncertaintyintoasmall,VARmacroeconomicmodelingframeworkthatincludes

inflation,industrialproduction,andnotesoutstandingatamonthlyfrequency,andpresent

results using Smoothed Local Projections. We assess the effects of uncertainty on

macroeconomicconditionspriortothestartofhyperinflationforeachGAPHcountryaswell

asforsixothercountriesthatdidnottipintohyperinflation.

Theseresultsshowthatincreaseduncertaintycausesariseininflationcontemporaneously

andforseveralmonthsafterwardintheGAPHcountriesthattippedintohyperinflation.For

otherEuropeancountrieswithlowerRVmeasures,uncertainty’saffectoninflationisabsent

ornearzero.Thesefindingsdemonstratetheutilityofourmethodologyas itallowsusto

makecomparisonsbetweencountries,suchasGermanyandFrance,whichwereoneither

sideofthereparationsimbroglioasapayerandrecipient,respectively,butthendistinguish

howthefightoverreparationstranslatedintogreateruncertaintyandthenhyperinflationin

Germany.Further,itallowsonetoincorporatemanycountry-specificnarrativesoftheperiod,

whichdetail howuncertainty over reparations drove expectations further into a negative

spiral.

Longruntrailsofglobalpoverty,1925-2010

MichailMoatsosEconomic&SocialHistoryGroup,UtrechtUniversity

Abstract

Whatusehasapovertylinewhenwedon'tknowwhatitallowsfor?Iexploittheweaknessesoftheseriouslycontestedmethodologybehindthedollar-a-dayapproachtomotivateaconsistentalternativeinglobalpovertymeasurement.Povertylinestargetingwelldefinedwelfarelevelsareconstructedasconsumptionbaskets.Thosebasketsarepricedlocallyandseparatelyforeachyear,andaccountforbasicnutrition,heating,housing,health,educationandotherexpenses.Thistransparentmethodishereappliedonlongrunpovertymeasurementforagroupofeightcountries,mostofwhicharewestern.Inthisdraftanumberofmethodologicalissueshavebeensimplified.Laterversionswillrelaxthesesimplifications,anddrasticallyexpandthenumberofcountriescovered.AnotablecontributionistheerroraccountingapproachusingMonteCarlotechniqueforpseudo-experiments.Thisisinlinewithrecommendation5for``totalerror''accounting,publishedintherecentCommissiononGlobalPovertyreport.Thusstatisticalanalysisofglobalpoverty,beyondtheusualpointestimates,isnowpossible.Theevolutionofthepovertyprofileinfivekeywesterncountries,seenfromabroaderglobalperspective,allowsforacomparativeanalysis.Amongthissmallgroupofcountries,theNetherlandsappeartobethechampionsinfightingabsolutepovertywithall3typesofpovertymeasuredherebecomingzerosince1987.

GreeceinaMonetaryUnion:

Lessonsfrom100YearsofExchange-RateExperience

MatthiasMorysDepartmentofEconomicsUniversityofYork(UK)

[email protected]

AbstractWeaddahistoricalandregionaldimensiontothedebateontheGreekdebtcrisis.Analysing

Greece,Romania,Serbia/YugoslaviaandBulgariafrompoliticalindependencetoWWII,we

findsurprisingparallelstothepresent:repeatedcyclesofentrytoandexitfrommonetary

unions,governmentdebtbuild-upanddefault,andfinancialsupervisionbyWestEuropean

countries.Goldstandardmembershipwasmoreshort-livedthaninanyotherpartofEurope

duetofiscaldominance.Grangercausalitytestsandmoneygrowthaccountingshowthat

theprevailingpatternoffiscaldominancewasonlybrokenunderinternationalfinancial

control,whenstrictconditionalityscaledbackthetreasury’sinfluence;onlythenwere

centralbanksabletoconductarule-boundmonetarypolicyandstabilizetheirexchange-

rates.Thelong-runrecordofGreecesuggeststhattheperennialeconomicandpolitical

objectiveofmonetaryunionmembershipcanonlybemaintainedandsecuredifboth

monetaryandfiscalpolicyremainsfirmlyanchoredinaEuropeaninstitutionalframework.

WhatDidCivilExaminationDoforKorea?

MyungSooChaJunseokHwangHeejinPark

Abstract

Civilserviceexamination,firstdesignedinancientChina,remainsapuzzle,becauseitrepresentsanoxymoron,i.e.opencompetitionforrent-seeking.ImportedintoKoreainCE958,theinstitutionremaineddejureopentobotheliteandnon-elite,whichraisesaseriesofissues.Whydidtheelitenotpreventrentsfrombeingdissipatedbybanningcommonersfromtakingcivilexamination?Didnon-elitepassersrepresentmereexceptionsorcausedenoughupwardmobilitytothreatenthestabilityofstatusorder?Despitebeingcriticizedforencouragingrotelearningofaretrogradeideologyanddivertingenergytodirectlyunproductiveactivities,didthetraditionofopencompetitionbasedonscholarshipfosterhumancapitalaccumulationandtherebytechnologicaldevelopment?Thispaperexplorestheeconomic,political,andsocialconsequencesofcivilserviceexaminationinKoreaunderChosŏndynasty(1392-1910),noneofwhichmakesmuchsenseonitsown.Todoso,weanalyzetherosterofcivilexaminationpassers,linkingitwiththelistofhigh-rankingofficialsandelitepresenceinpre-colonialKoreaandalsowithindicatorsofeconomicdevelopmentincolonialKoreaincludingliteracyandthespreadofhigh-yieldseedvarieties.Wecomparethegeographyofelitepresenceandexaminationsuccessmadebyapparentlyplebeianbackgroundtoconfirmthatasubstantialnumberofcommonerspasseduppercivilexaminationtobeselectedasofficials.Thecommonerencroachmenttookplace,becauseinanattempttocontrolthenobilitythethroneintervenedintheprocessofupperexaminationdistributingexaminationsuccessinamoreorlessbalancedwayacrossdifferentregions.Despitebeingweakenedbytheupwardmobility,statusorderpersisted,becauseeliteenjoyedprivilegedaccesstoofficialdom,andbecauseelitetookcontroloflocalcommunitybydominatingthesuccessinlowerexamination,anon-compulsorypreliminarytoupperexamination.Thedevelopmentalconsequencesofcivilexaminationvarieddependingonthestrengthofelitedominance,withexaminationsuccessencouragingindividualstolearntoreadandwriteandtoadopthigh-yieldriceseedvarieties,whenitfosteredupwardmobility,butdiscouragingliteracyandtechnologicallearning,whenreinforcedelitedominance.Onbalance,civilserviceexaminationcouldhavehelpedthetwentiethcenturyKoreaachievefastergrowthandmakesmoothertransitiontodemocracy,buttheputative

benefitsshouldbebalancedbyincurredcosts,whichincludedwastedtalents,energydivertedtodirectlynon-productiveactivities,theascendancyofabackward-lookingideology.

TheGoldPool(1961-1968)andthefalloftheBrettonWoodssystem:

Lessonsforcentralbankcooperation

MichaelBordo(RutgersUniversity,HooverInstitutionandNBER),EricMonnet(BankofFrance,

ParisSchoolofEconomicsandCEPR),AlainNaef(CambridgeUniversity)

Abstract

Westudyoneofthemostambitiouscasesofcentralbankcooperationinhistory,theLondonGoldPool,andinvestigatewhyitfailed.Tostabilizethedollarpriceofgold,majorcentralbankspooledtheirgoldinterventionsfrom1961to1968,sharingprofitsandlosses.BasedonnewdataandarchivesfromtheBankforInternationalSettlements,BankofFranceandBankofEngland,weconfirmcontemporaries’claimthattheGoldPoolwasfatallydamagedbythefateofsterling–thesecondinternationalreservecurrencyafterthedollar.Fromtheearly1964sterlingtroublestothe1967sterlingdevaluation,thedollar-priceofgoldand,thenGoldPoolinterventions,wereinfluencedbythesterlingforwardexchangerateaswellasbyUSdomesticfactors.Moreover,theNovember1967sterlingdevaluationspurredspeculationonthedollarpriceofgoldand,throughGoldPoolinterventions,deliveredaseriousblowtoUSgoldreserves.ThecollapseoftheGoldPoolin1968ledtoatwo-tieredgoldmarketsystemandanticipatedtheclosingofthegoldwindow.TheGoldPoolisarareexampleinhistoryofcentralbankcooperationthatlastedalmostadecade,impliedmonthlytransactionsandclearingbetweencentralbanksandallowedforautonomousmonetarypolicystanceacrosscountries.LiteratureonBrettonWoodsusuallymentionsanddiscussestheGoldPoolbutthereisonlylimitedresearchontheriseandfallofthisuniquecooperationsyndicate.OurfindingsareinlinewithpreviousliteratureindownplayingtheroleofFrancenoncooperativebehaviourinthefalloftheGoldPool.Unlikepreviousliterature,however,weemphasizetheroleofEuropeanbalanceofpaymentproblemsinthefalloftheGoldPool.Inparticular,weshowtheimportanceofthesterlingcrisisin1967leadingtoanimportantdrainofUSgoldreservesandtothefallofthegoldsyndicate.TheGoldPoolreinforcedthetransmissionofthesterlingcrisistotheUSgoldreserves.WedocumentmechanismsandexplainwhythecontagionfromsterlingtothedollaroccurredlargelybecauseUSpolicieswerealsodeemedinflationaryandinsufficientlycredible.Twoimportantconclusionsstandout,whicharestillrelevanttotoday’sdebatesoncooperationandtheinternationalmonetarysystem.First,centralbankcooperation–evenwhenwell-designedandconductedonalargescale–failsifcountriesfollownon-credibledomesticpoliciesunderminingconfidenceintheircurrency.Second,theendoftheGoldPoolprovidesaninterestingcaseofpotentialnegativeexternalities–reinforcedbycooperation–betweenreservecurrencies.

CollectivizationofSovietagricultureandthe1932–1933famine

NatalyaNaumenko

Abstract

Collectivizationofagricultureisthelargesteconomicexperimentinthe20thcentury.Inthecourseofjustadecade,from1929to1939,theentirestructureoftheeconomyandeconomicrelationshipschangedformorethan100millionSovietpeasants:fromindividualindependentproducersandfreemarketstolargecollectivefarmsandimposedplansofproduction.LateragriculturewasalsocollectivizedintheBalticstatesoccupiedbytheSovietUnion,incommunistChinaandinNorthKorea.Allinall,collectivizationaffectedthelivesofhundredsofmillionsofpeople.Itsconsequencesandimplications,however,arestillnotwellstudied.

InthisworkIshowthatintheshortruncollectivizationofagricultureintheSovietUnion

contributedtothe1932–1933faminethatkilledseventotenmillionpeople2.Moreimportantly,Idemonstratethatcollectivizationincreasedmortalitymainlyduetoadropingrainproductiononcollectivefarms.Essentially,Iarguethatcollectivefarmsdisruptedthelinkbetweeneffortandreward,andconsequentlypeasantsreducedtheeffortputintoproduction,productiondroppedandafaminefollowed.

ThisworkconcentratesonSovietUkraineforthreereasons.First,Ukrainelostthehighest

proportionofitspopulation3.Accordingtooneofthemostconservativeestimates,itsufferedadirectpopulationlossof2.6millionoutof30million.Second,Ukrainewasthe“grainbasket”oftheSovietUnion,supplyingupto40%ofallgraincollections.Thus,alltheexcessesandimbalancesofSovietagriculturalpoliciesmusthavebeenpresentinUkraine.Andthird,Ukrainekeptandpublishedexcellentstatisticaldata.Duringthe1920stheCentralStatisticalOfficeofUkrainepublishedextremelydetailedstatisticaldatathatImakeextensiveuseof.

Ibuildmyargumentasfollows.Tobegin,Idemonstratethatareasthatweremorecollectivizedin1930hadhighermortalityratesin1933.Toaccountforpotentialsourcesofendogeneity,Icontrolforfactorsthatcouldhaveaffectedbothcollectivizationandmortality:wealth(proxiedbythevalueofagriculturalequipmentpercapitaandruralliteracyrate),livestockpercapita,urbanizationrate,andpopulationdensity.Inaddition,Iofferinstrumentalvariableestimates

usingthedifferentialeffectofStalin’s1930“Dizzywithsuccessarticle.”4AfterStalin’spublicationinthespringof1930,peasantsstartedmassivelyleavingcollectivefarms.Iarguethatpeasantsintheareaswherespringof1930startedunexpectedlyearlierhadlesstimetogetlandallotmentsfromcollectivefarmsbeforethespringsowing,andthereforewerestuckincollectives.Thus,theunexpectedlywarmerspringeffectivelyincreasedthecollectivizationrate.

MyIVestimatesoftheeffectofcollectivizationarehigherthanOLSestimates,suggestingthatthegovernmenttriedtocollectivizewealthierdistrictsfirst.Finally,Ialsorunplacebotestsusing1927mortalityratesandshowthatthereisnorelationshipbetweenmortalityin1927andcollectivizationratein1930.

Next,Itrytounderstandwhycollectivizationincreasedmortality:wasitduetograincollections,dropinproduction,orotherfactors?Onlyveryaggregateddataongrainproductionandcollectionsareavailableforthefamineyears,soIhavetorelyonindirectevidence.First,IconfirmtheMengetal.(2015)findingstudyingtheGreatChineseFamineandshowthatareasusuallyproducingmoregrainpercapitahadhigherfaminemortality.Presumably,ahigherproportionofgrainwasextractedfrommoreproductiveareas.Therefore,Iuse1925grainproductionpercapitaasaproxyforgraincollections.

Second,Ishowthatbothcollectivizationrateandpre-faminegrainproductionpercapitasimultaneouslyincreasedmortality,butthattheinteractiontermbetweencollectivizationandgrainproductionwasnegative.Ifcollectivizationincreasedmortalitybecauseoftoomuchex-tractionofgrainfromcollectivefarms,theinteractioncoefficientwouldhavebeenpositive.Itwasmucheasiertotakegrainfromasinglecollectivefarmgranaryinsteadofsearchinghun-dredsofindividualhouseholds.Giventhatthegovernmentoverextractedfromgrainproducingareas,itmusthaveoverextractedevenmorefromcollectivefarmsingrainproducingareas.ButthisisnotwhatIobserveinthedata.Eithercollectivefarmswereabletosignallowharvestmorecrediblythanindividualhouseholds,orthegovernmentdeliberatelyputmorepressureonindividualpeasants.Ineithercase,collectivizationincreasedmortalitynotduetohighergraincollections.Therefore,theremusthavebeenanactualshortageofproducedfood.

Third,Idemonstratethat,controllingforcollectivizationrate,ahighernumberofhouseholdspercollectivefarmincreasedmortality.Iarguethatthelargerthecollectivefarmwas,thehigherthemonitoringcostswereandthemoredifficultcoordinationwas,leadingtoadropinproduction.

Finally,Iexamineallotherfactorsthatcouldhaveincreasedfaminemortality:killingoflivestock,deportationofkulaks(therichestandmostproductivepeasants),politicalzealousnessandpreferenceforcollectivization,humancapital(abilitytocooperate),inequality,availabilityoftractors,andgovernmentcontrolovertheterritory.Someofthesefactorsdoaffectmortality,buttheeffectsizesaremuchsmallerandthemainresultdoesnotchange:ahighernumberofhouseholdspercollectivefarmincreasedmortality,andtheinteractioncoefficientbetweengrainproductionandcollectivizationisnegative.Thus,Iconcludethatthemainreasontherewasanincreaseofmortalityinmorecollectivizedareaswasadropingrainproductiononcollectivefarms.

THEORIGINSOFTHEITALIANREGIONALDIVIDE:EVIDENCEFROMREALWAGES,1861-1913

GiovanniFederico(DepartmentofEconomicsandManagement,UniversityofPisa)

AlessandroNuvolari

(Sant’AnnaSchoolofAdvancedStudies,Pisa)

MichelangeloVasta(DepartmentofEconomicsandStatistics,UniversityofSiena)

AbstractThehistoricaloriginsofthelonglastingItalianNorth-Southdividehavealwaysbeen

controversial,butthescholarlydebatehasbeenhamperedbythedearthofactual

dataonthesizeofthegapanditshistoricalevolution.Inthispaper,wefillthisgapby

estimatinganewprovincialdata-setofwelfareratios(Allen2001)fromtheUnification

ofItalyin1861toWorldWarOne.Italyasawholewasverypoorthroughoutthe

period,witharathermodestimprovementsincethelate19thcentury.This

improvementhadstartedintheNorth-Westregions,thecradleofItalian

industrialization,inthe1880s,whilerealwagesinothermacro-areas(North-East,

Centre,Southandislands)remainedstagnantuntiltheearly20thcentury,risingsizably

onlyinthepre-waryears.ThegapbetweenNorth-WestandtheSouth,already

substantialin1861wideneduntiltheveryendoftheperiod.TheContinentalSouth

waspoorerthantheNorthEast,butnotalwaysoftheCentre,whilerealwagesinthe

Islands(i.e.Sicily)wereclosetonationalaverage.

DANGERTOTHEOLDLADYOFTHREADNEEDLESTREET?

THEBANKRESTRICTIONACTANDTHEREGIMESHIFTTOPAPERMONEY,1797-18215

PatrickK.O’Brien

DepartmentofEconomicHistory,LondonSchoolofEconomics

NunoPalma

DepartmentofEconomics,Econometrics,andFinance,UniversityofGroningen

Abstract

TheBankRestrictionActof1797wastheunconventionalmonetarypolicyofitstime.Itsuspended

theconvertibilityoftheBankofEngland'snotesintogold,apolicywhichlasteduntil1821.The

currenthistoricalconsensusisthatthesuspensionwasaresultofthestate'sneedtofinancethewar,

France’sremonetization,alossofconfidenceintheEnglishcountrybanks,andarunontheBankof

England’sreservesfollowingalandingofFrenchtroopsinWales.Wearguethatwhilethesefactors

helpusunderstandthetimingoftheRestrictionperiod,theycannotexplainitssuccess.Wedeploy

newlong-termdatawhichleadsustoacomplementaryexplanation:thepolicysucceededthanksto

thereputationoftheBankofEngland,achievedthroughacenturyofprudentialcollaborationbetween

theBankandtheTreasury.

Keywords:BankofEngland,financialrevolution,fiatmoney,moneysupply,monetarypolicy

commitment,reputation,andtime-consistency,regimeshift

JELcodes:N13,N23,N43

5 We are grateful to Mark Dincecco, Rui Esteves, Alex Green, Marjolein 't Hart, Phillip Hoffman, Alejandra Irigoin, Richard Kleer, Kevin O’Rourke, Jaime Reis, Rebecca Simson, Albrecht Ritschl, Joan R. Rosés, Stephen Timmons, François Velde, Jan Luiten van Zanden, and especially Pamfili Antipa and Joost Jonker for comments and discussions. The usual disclaimer applies. Some of the work in this paper previously circulated as LSE Department of Economic History Working Paper No. 156/11.

WhenBritainturnedinward:Protectionandtheshifttowards

EmpireininterwarBritain

AlandeBromhead(QueensUniversityBelfast)

AlanFernihough(QueensUniversityBelfast),

MarkusLampe(ViennaUniversityofEconomicsandBusiness),

KevinHjortshøjO’Rourke(AllSoulsCollege,Oxford)

Abstract

Internationaltradebecamemuchlessmultilateralduringthe1930s.However,previous

studies,lookingataggregatetradeflows,havearguedthatdiscriminatorytradepolicies

hadcomparativelylittletodowiththis.Inthispaperwerevisitthequestionofwhether

tradepolicywasresponsiblefortheshifttowardsintra-Imperialtrade,butadoptan

entirelydifferentempiricalapproachintacklingtheissue.Ratherthanlookingatthe

relationshipbetweenaggregatebilateraltradeontheonehand,andcountry-pairbloc

membershipontheother,westudytheactual(anddiscriminatory)tradepolicies

pursuedbyonecountry,theUnitedKingdom,ingreatdetail.Ratherthanlookingat

whethertradeblocsexistedornot,welookatwhatonekeymemberofonetradebloc

actuallydid,andatwhattheeffectsofitspolicieswere.Furthermore,sincesomuch

interwarprotectionismconsistedofnon-tariffbarrierstotrade,affectingimportsof

particularcommodities,andsincetariffratesdifferedgreatlyacrosscommodities,we

usedisaggregated,commodity-specificdataonbothtradeandtradepolicies.

WethereforecollectedanddigitizeddataonimportsintotheUKof847productsfrom

42countriesbetween1924and1938.Thesewerethenaggregatedup,allowingusto

constructanimportdatabasefor258productcategoriesthatareconsistentlydefined

overtime.Wealsocollectedbilateral,commodityandcountry-specificdataontariffand

non-tariffbarrierstotradeforthesamecountries,productsandyears.Theresultisa

datasetwith162,540potentialobservations,althoughthevalueofmanyoftheseisof

coursezero.Becausetradepoliciesvariedbycommodity,year,andcountry,wecan

calculateelasticitiesoftradewithrespecttotariffsincludingbothcountrytimes

commodity,andcommoditytimesyear,fixedeffectsintheeconometricspecification.

Armedwiththeseelasticities,wecanthencalculateavarietyofcounterfactual“free

trade”or“constantpolicy”equilibriaforindividualyearsinthe1930s,whichcanbe

comparedwiththeactualtradedata.Themodelweusetocalculatethese

counterfactualequilibriaisstraightforward:onthedemandsideweassumenested

utilityfunctionsasinBrodaandWeinstein(2006),whileonthesupplysideasingle

productionsectortransformsthesolefactorofproductionintodomesticallyconsumed

outputandexportsviaaconstantelasticityoftransformation(CET)production

function.4Inthismannerweobtainestimatesoftheimpactofprotectionontheshare

oftheBritishEmpireintheUK’simports.

WefindthatmorethanhalfoftheincreaseintheEmpire’sshareofUKimportscanbe

attributedtotradepolicy.Policyaccountedforalmost70%oftheincreasebetween

1930and1933.Ourresultsareavindicationoftraditionalhistoricalaccounts,which

arguethattheincreasinglybilateralnatureofinterwartradewaslargelyduetothe

policiespursuedbygovernments.Whateverabouttheimpactoftradepoliciesontrade

flowstoday,Britishtradepolicymattered,alot,duringthe1930s.

Longrunchangesinthebodymassindexofadultsinthreefoodabundant

settlersocieties:Australia,CanadaandNewZealand

John Cranfield, Department of Food, Agricultural and Resource Economics, University of Guelph

Kris Inwood, Department of Economics and Department of History,

University of Guelph

Les Oxley, Department of Economics, University of Waikato

Evan Roberts, Department of Sociology and Minnesota Population Center, University of Minnesota

Abstract

BodyMassIndex(BMI)andratesofobesity/overweighthaveriseninmanyregions.Muchof

thehistoricalresearchsupportingtheseconclusions,however,examinesthefirstdecadesof

the20thcentury,althoughsomeevidenceofrisingBMIinearlierdecadesisnowbecoming

available.RelativelyfewstudieshaveexaminedtrendsinBMIbeforethe1960s,andfewerstill

for the era beforeWWII or the nineteenth century. Therefore, the focus of this paper is

considerationofthelongrunpatternofBMIchangesinsocietiesotherthanthosepreviously

considered,i.e.,theUSandUK,inparticularthreefoodabundantsettlersocieties,Australia,

CanadaandNewZealand.TheonsetofsustainedBMIincreaseappearstohavecomelaterin

thesesocieties than in theUS.OtherpreviouslypublishedevidenceonBMI tends to focus

exclusivelyonmodernperiods,wheretheemphasisseemstobeonestablishingcorrelates

withobesity/overweightinlargecross-sectionsofthepopulation,oftenaspartofmuchlarger

health surveys. Thus,muchof theworldwide increase in obesity has been framed in the

medicalandpublichealthliteratureasaphenomenonofthepast35-40yearswiththisframing

inNewZealandandAustraliabeingsimilar.

Thedatathatweusearedrawnfromtwomainsources;i)WWIandWWIIattestationforms

provideheightandweightmeasuresforsoldiersfromAustralia,CanadaandNewZealandand

ii)modernhealthsurveysprovideconfidentialisedunitrecorddataforthelater20thandearly

21stcenturies.ForNewZealandwealsohaveaccesstoheightsandweightsfromaselection

ofNZprisons,1840-1975.Thecombinationofhistoricalandmodernhealthsurveydatathat

we have collated, provides an unprecedented source of long-term data for these three

countriesofinterestandactsasasignificantbasetocomparewiththeresultsfortheUSand

UK.

Intermsoftheresultsrelatingtowithincountrytrends, twodifferentpatternsemerge. In

CanadaandAustraliathegapbetweenmales(leading)andfemaleBMIsremainslargewith

some increases in the gap in the 35-39 year age group, but narrowing in the 45-49 range

especially in Australia. In contrast, the BMI of both sexes in New Zealand has effectively

converged formostage ranges (although ithasbeensimilar for the45-49age rangesince

1977).Intermsofcross-countrycomparisonsovertime,theresultsforthefullsamplesshow

aremarkablysimilarlong-termpatternformalesinallthreecountriesalthoughtheabsolute

differencesbetweenleadingBMIcountrieshaschangedovertimeculminatinginNewZealand

beingthe‘topranked’obesecountryformalesinthe20-49agegroup.Forfemalesthepattern

andtrendsarequitedifferent,withNewZealandwomenexceedingtheBMIofsameaged

femalesinAustraliaandCanadafromthe1980sonwards.Ifanythingtheresultssuggestthat

NewZealandfemaleBMIcontinuestogrowwhilethatofAustraliamaybelevelingoff.Future

workwillexplorethecausesofthepatternsofresultsidentified.

BreakingfromColonialInstitutions:Haiti'sIdleLand,1928-1950

CraigPalssonYaleUniversity

Abstract

Economistsandeconomichistoriansattributelong-termunderdevelopmentinformercolonies

toeitherpersistent,badinstitutionsortoinitialfactorendowmentsthatpredisposedthe

colonytoinequality.ThispaperusesapuzzleinHaiti'seconomichistorytoshowthatthese

frameworksareincomplete.Intheearly20thcentury,largenumbersofHaitianworkers

migratedabroadtoworkonplantations,eventhoughlotsoffertilelandsatidleathome.This

puzzlingfactreflectstwolandinstitutionsdevelopedafterHaiti’sindependencein1804.First,

lineageshadjointclaimsoverthealienationofland;onehouseholdcouldexploitland,butto

sellittheyneededagreementfromalargenumberofextendedkin.Second,theearly-

nineteenthcenturyHaitiangovernmenthaddistributedlandandbannedlandownershipby

foreigners,preventingthecreationoflargeholdingsandestablishingacheckerboardof

landholdingswithmultipleclaimants.

Toassesshowthischeckerboardledtoidleland,Iusedataon5,700plotsadoptedover22

yearsunderagovernmentrentalprogram.Asimplemodeloftheoptimalallocationoflabor

(betweenHaitiandelsewhere)andland(betweensubsistenceholdingsandplantations)implies

thatthecheckerboardreduceslandadoptionandattenuatestheextenttowhichnew

plantationsdevelopafteramigrationcostshock.DatafromsettlementpatternsinHaitianda

massacreintheDominicanRepublicconfirmthesepredictions.

RainfallPatternsandHumanSettlementinTropicalAfricaandAsia

Compared:DidAfricanFarmersFaceGreaterInsecurity?

KostadisPapaioannouLondonSchoolofEconomics

EwoutFrankema

WageningenUniversity

Abstract

Environmental conditions for sedentaryagriculturehavebeenamajordeterminantof the

spatialdistributionofthehumanspeciesthroughoutrecordedhumanhistory.Millenniaago,

theworld’sprimepeasant-basedcivilizationsemergedinmajorriverdelta’swithabundant

accesstofreshwaterorinmountainousterrainswheredifferencesinaltitudeandassociated

rainfall patterns allowed for highly diverse cropping systems in a relatively confined

geographicalarea.Of course,access to freshwater–be it through regularprecipitationor

stored in lakes and rivers– wasn’t all thatmattered for the settlement and expansion of

historical populations. The spread of human and animal diseases, the location of

transportationnetworksandtraderoutes,andthepresenceofsub-soildepositsallplayed

their part.Moreover, changes in agricultural and transportation technology allowed some

sparselyinhabitedregionstobecomemoredenselysettled,whiledegradingenvironmental

conditionshadoppositeeffects in some formerhighdensity areas. Yet, despite long-term

ecological and historical dynamics, the spatial connections between climate, agricultural

developmentandhumansettlementarestillvisibleatpresent.

Adverse climatological conditions have been an oft-mentioned cause for disappointing

productivitygrowthinAfricanagriculture,andanimportantfactorinexplaininglowhistorical

densitiesofpopulationaswellaspersistentpoverty.ThatrainfallpatternsintropicalAfrica

mayexhibitagreaterdegreeofyear-to-yearvariabilitythaninothertropicalareashasbeen

givenfarlessattention.Rainfallvariabilityposesconstraintstoagriculturalintensificationand

thegrowthofhistoricalpopulations,eveninareaswhereaverageprecipitationlevelsarehigh

enoughtosupportthecultivationofalargerangeofcrops.Underpredictablerainfallregimes

farmers can adapt their production strategies (e.g. by cropping drought resistant crops,

practicingseasonaltranshumance),butwhenrainsvaryfromyeartoyear,suchadaptations

aremoredifficulttomake.

Thisstudyventures intotwoquestionsofhistoricalsignificance:hasrainfall,onthewhole,

beenmoreinsecureandthuslesspredictableintropicalAfricathanintropicalAsia?Andifso,

can this explainpartof thedifference inpopulationdensities that existed inboth regions

beforetheimpactofmodernmedicalandtransportationtechnologiesthatcreatedconditions

forthemajordemographicboomandurbanizationpatternsofthepost-1950era?

We address these questions using historical rainfall data from colonial meteorological

stations.Wecompileanewdatasetofannualandmonthlyrainfalllevelscollectedfromlocal

weather stations setupby former colonial governments for221districts in tropicalAfrica

(141)andAsia (80).Werefineexistingmeasuresofrainfallvariabilitybydistinguishingthe

overallvariationinannualrainfallfromthefrequencyofrainfallshocksandthe intensityof

rainfall shocks.We find that, controlling formean rainfall levels, rainfall variability indeed

explainsasubstantialadditionalpartofthevariationinpopulationdensitiesacrosstropical

AfricaandAsia.

Riskmitigationandselectionunderforwardcontracts:

19th-centuryIndianindentureship

AlexanderPersaudUniversityofMichigan

Abstract

Uncertaintyabouteconomicconditions,notmerelyaveragewagedifferentialsbetween

markets,affectsmigration.Exanteforward,guaranteedmigrationcontracts--usedbymillions

ofworkers--canreduceuncertaintyformigrants.Icombineaspectsofthetwoandask,how

doesorigin-marketuncertaintyaffectout-migrationunderforwardcontracts?Iturntonew,

uniquemicrodataonroughly250,000Indianindenturedservantssentaroundtheworldunder

forwardcontracts.Indianindentureshipoffersacleanidentificationstrategytoisolatethe

importanceofsending-marketuncertainty.Themigrationdecisionisconsistentwithmigrating

toescapepricevolatility,mymainmeasureofuncertainty.Aone-standarddeviationincreasein

adistrict'spricevolatilityincreasesextensivemarginmigrationfromthatdistrictby2%andthe

intensivemarginby5%.Ifindcompositionaldifferencesbysocialnetwork:differentcastes

responddifferentlytoeconomicconditions.Theeffectsofpricesandwagesonlandowning

castesarethereverseofthoseonnon-landowningcastes.Thereissuggestiveevidencethat

upper,landowningcastesareabletosmoothagainstvolatility,whichmaybeduetocaste-

specificinsurancenetworksinsurance.Finally,volatilityexertsapersistentnegativeeffectby

loweringreturnmigration(withinroughly10years)by5%.Overall,volatility,ameasurement

linkedtothesecondmoment(variance),hasfirst-ordereffectsonmigration.

TradeAgreements,DemocracyandPoliticalAlliances:UnderstandingtheevolutionoftheglobalinstitutionalsystemduringtheFirstGlobalization

RuiPedroEsteves,OxfordUniversityFlorianPloeckl,UniversityofAdelaide

Abstract

Thelong19thcenturysawtheemergenceofmodernnationstatesandespeciallyduringtheFirstGlobalizationashifttowardsdemocratization,theformalizationofexplicitpoliticalalliances,andthedevelopmentofanetworkof international tradeagreements.Thispaper looksat theco-evolutionoftheseinstitutionalstructures,investigatingthenatureoftherelationshipsbetweenthe institutions, especially the strength and direction of a potential influence, to betterunderstandtheevolutionofpoliticalandeconomicinstitutionsduringtheFirstGlobalization.Thethreeinstitutionalstructurespotentiallyshapedeachother’sdevelopment,whichraisestheproblem of endogeneity. Manger and Pickup (2016) for example demonstrates that theglobalization after World War II saw strong reciprocal links between trade agreements anddemocratization. Furthermore, the network nature of political alliances trade agreementsrequiresthatthemutualdependencybetweennetworktiesneedstobetakenintoaccount.Although there are several empirical estimation approacheswhich areused todealwith theidentificationproblemorthespatialcorrelationwithinnetworkstructureswedon’tbelievethattheseareavailableorusefullyapplicable inthiscircumstance.Wethereforeuseasimulation-based methodology, more precisely the SIENA approach, which is a recently developedmethodologythatisfairlywidelyapplicabletosuchpotentiallyendogenousnetworksettings.Itmodels particular effect mechanisms within actors’ evaluation functions for network tieadjustments (i.e. forminganallianceorcancellinga trade treaty)andbehaviourchanges (i.e.changingthelevelofDemocracy),thensimulatesthejointevolutionofthethreeoutcomes,andderivesparametersforthemodelledeffectsbymatchingsimulationresultswithactualobserveddata.Thispaperlinksthethreeoutcomes,tradetreaties,alliancesanddemocracy,andconsequentlyinvestigates the nature of network structure effects, for example triad closure effects, thereciprocal influence between the three outcomes, for example whether the difference indemocracy levels affected the likelihood of a political alliance, aswell as the role of certaincovariates,forexampleGDP,inmoredetail.The main results show that network structure effects differed somewhat between the twonetworks,whilepoliticalalliancestendedtoclusterthroughclosingtriadsfollowedtradetreatiesamost-favourednationlogicwithtiesdependingontheextentoftreatiesofthetwostateswiththird countries. In terms of reciprocal effects, there is however no evidence for a direct linkbetween the two networks itself. The relationships between the networks and the level ofdemocracyhasseveralaspects,forexampletheextentofmilitaryalliancesmatteredwhilethe

roleofdemocracywasbinarytoinfluencethelikelihoodtoincreasethatlevel.Also,thelevelofdemocracy,wealthandmonetaryarrangementsoftradepartnersappeartohavematteredforthe democratic development, while those of alliance partners did not. Finally, the effect ofdistance and contiguity on network changes follow expectations while a common languageseeminglyhadnoeffect.

InternationalWell-beingInequalityintheLongRun

LeandroPradosdelaEscosura(UniversidadCarlosIII,Groningen,andCEPR)

[email protected]

Abstract

This paper assesses well-being inequality across countries over the long run. Howsubstantial gains in different dimensions of well-being have been distributedinternationally over the last century and a half? Have differences across countrieswidened?HasthedistancebetweentheWestandtheRestdeepened?Didallwell-beingdimensionsevolvealongside?Thispaperprovidesalong-runviewofinter-countryinequalityinwell-beingbasedonanewdataset.Well-beingdimensionsaltertheviewonlongruninequalityderivedfromrealpercapitaGDP.Whilerealpercapitaincomeinequalityhasexperiencedasustainedrise until the late 20th century, inequality in non-economic dimensions of wellbeing(longevity, education, and human development) after increasing up to early 20thcentury, fell to1990.Thespreadofmassprimaryeducationandtheepidemiologicaltransition,bywhichchronicdiseasereplaced infectiousdiseaseas themaincauseofdeath,werethemaindriversofsuchaequalisingtrendinwell-being.ThegapbetweenOECDandtheRestonlypartiallyexplainstheevolutionofwell-beinginequalityasthedispersionwithintherestoftheworldgainsweightastimegoesby.Thediffusionof thehealth transitionsdrives life expectancy inequality andaHealthKuznetsCurve canbe suggested for lifeexpectancyatbirth. Inequality fellwhile lifeexpectancyrosethroughoutthetwentiethcenturyastheepidemiologicaltransitionwasspreadingacrosstheglobeand,then,stagnatedasitwascompleted.Anewphaseofincreasing inequalityopenedat the turnof thenewcentury, associated toa secondhealthtransition,linkedtothesuccessfulflightagainstcardiovascularandrespiratorydisease that, so far,hasonlyeffected thedevelopedcountries,givingaboost to lifeexpectancyoftheelderly.Totheextentthenewmedicaltechnologybecomeswidelyaccessible, a decline in life expectancy inequality could be foreseen during thetwentieth-firstcenturyclosingthesecondhealthKuznetscurve.Whyinequalitydeclinedinsocialdimensionsandhumandevelopment,butnotinGDPperhead?Inisduetopublicpolicyorjusttothefactthatmedicaltechnologyisapublicgood?WhyasecondhealthtransitionhasnottakenplaceintheRest?Hasitbeentheoutcomeofinequalisingnewmedicaltechnologies?Keywords:InternationalInequality,Well-being,LifeExpectancy,Literacy,SchoolEnrolment,PerCapitaGDPJELClassification:I00,N30,O15,O50

TheHandofthePastandtheRailwayNetworksofthePresent

DouglasJ.PuffertGordonCollege

Abstract

Thehistoricaldevelopmentofrailwaynetworkshasleftalegacyofvaryingdegreesofnetworkintegrationindifferentregionsoftheworld.Networkintegrationaffectstransportsystemcostsandperformance,whichinturnaffectsaneconomy’soverallmarketintegrationandgrowth.Networkintegrationmaybefacilitatedbycommontechnicalstandards,mostimportantlyintrackgauge(widthbetweentherails),butalsoinbrakingsystems,signalingandtraincontrolsystems,electrificationsystems,carprofiles(heightsandwidths),andothertechnicalparameters,alongwithadministrativeproceduresthatfacilitatethrough-shipmentoffreightandtravelofpassengersacrossmultiplenationalorcorporaterailnetworks.Thispaperfocusesonstandardizationoftrackgaugewhileaddressingtheotherissuesinpassing.

Atthetechnicallevel,thechiefhindrancetotrack-gaugestandardizationisthecostofconvertingtrackandrollingstocktoacommongauge.Particulartechnicalpracticesandinnovationsaffectthesecosts.Ataninstitutionallevel,transactioncostsorcoordinationcostscomeintoplay,aschoicesofgaugebyonelocalrailwaysystemaffectthecostsofthrough-shipmentandbenefitsofnetworkintegrationexperiencedbyneighboringlocalrailwaysystems.Thatis,therearenetworkexternalities.Processesofconversion,pastandpresent,havefrequentlybeenfacilitatedbyinstitutionalinnovationsthateffectivelyinternalizetheseexternalities.Choicestoconvertornotalsodependontechnologythataffectsthecostsoftransportacrossbreaksofgauge,aswellasontheunderlyingdemandfortransportacrossbreaksofgauge.Allofthesefeaturesaffectthethresholdsofnetworkscaleandtransportvolumethatdeterminewhetherornottrackgaugeisstandardized.

Thepaperappliesananalyticalframeworkincorporatingthesefeaturestoselectedepisodesinrailwayhistory.Afterreviewingpastinstancesofstandardizationdiscussedsomewhatdifferentlyinmypreviouswork,itgivesparticularattentiontocurrentchoicesfororagainststandardizationinregionswithlonghistoriesofincreasingbutincompletenetworkintegration.Australiastillhasthreegaugeinuseafter160years.Itcompletedacommon-gaugenetworklinkingstatecapitalsin1995,butproposalsforconvertingtheremainingroutesusingatleastoneoftheothergaugeshavenotcometofruition,andtheeconomiccaseformuchfurtherchangeappearsdoubtful.India,bycontrast,isnowinthefinalstagesofendingitsownwidespreaduseofvariantgauges,bringingaconclusiontoa150-year-longhistoricalprocess.TheBalticcountries,inconjunctionwiththeEuropeanUnion,havebeenpursuingarationalizationoftheirgaugeconfigurationsincethecollapseofthe(broadgauge)SovietUnionandtheirincreasingeconomicintegrationwiththeEU.Theseeffortsarenowbearingfruit,althoughthefulloutcomeisnotyetclear.Thepapergivesbrieferattentiontorecentdevelopmentsin(broadgauge)Spainandelsewhere.

Thepaperconcludeswithreflectionsonlessonsforthebroadertopicofpathdependenceandtheadaptabilityoftheeconomytochangingpayoffstructuresfortechnicalchoicesandothermatters.Itaddsinsightontheperennialquestionofhowhistorymatters.

OfficerRetentionandMilitarySpending:

TheRiseoftheMilitaryIndustrialComplexduringtheSecondWorldWar

AhmedRahman,AssociateProfessor,USNA

Abstract

ThisprojectexamineshowtopmilitarypersonnelwithintheU.S.Navycontributedtomilitaryexpendituresaroundthecountry.Itdoesthisbyaskingtwobasicquestion.First,whatfactorsinducenavalofficers toexitmilitary service?And second,whatare someof the longer termimplicationsofofficersfromdifferentregionsofthecountryexitingtheserviceatdifferentrates,mainlythosehavingtodowiththespatialdistributionofmilitaryresources?FordataweusenavalpersonnelrecordsofofficersservingintheU.S.Navyfrom1870tothelate1930s. Specifically,wedocument the region (typically city and state) fromwhicheachnewlycommissionedofficerisappointedforallNavalAcademygraduatesforthegraduatingclassesof1870to1919.Wefurtherdocumentthelengthoftenureofeachnavalofficer,acquiredfromofficialU.S.Navyregisters. In thiswayweareable toconstructuniquemeasuresof“militaryrepresentation”acrossU.S.countiesfromtheReconstructionperiodtothedawnoftheSecondWorldWar.With each Naval Academy graduating class embodying a fairly even geographicrepresentationofthenation,weareabletotrackhowskewedthisrepresentationbecomesovertime.Totheseofficerprofileswemergecounty-leveldata.Specifically,weincorporatemilitaryspending within counties during the Second World War documented by Jaworski (2016).Spendingcanbecategorizedbymilitarybranchandpurpose.Inthiswaywecanisolatespendingoriginatingfromnavalbudgetsfromspendingcomingfromothersources.Finally,weincorporateothercounty-levelmilitaryspendingmeasuresfromCullenandFishback(2006)andcounty-leveleconomicanddemographicdatafromHaines(2010).Theempiricalanalysisproducesanumberoffindings.AsinGlaserandRahman(2016),wefindthat wage stagnation within the Navy due to lack of promotion contributed to worker exit,suggesting that theseworkers foundexternal jobs in alternative industries.Unique from thiswork,however,wealsofindthateconomicconditionsfromofficers'regionsoforigincontributedtotheirexitsaswell–themoreurbanandmanufacturingorientedthecounty,thestrongerthepullonofficerstoexittheNavy.Becauseofthis,wearguethatseniorofficersdisproportionatelyoriginatedfromeconomicallydepressedregions.Using this variation in officer county-of-origin and duration of service, we also constructmeasuresofseniornavalofficerrepresentationthatvarybycounty.UsingthesemeasureswefindthatofficerrepresentationpositivelypredictsregionalnavalspendingduringWorldWarII.Thisfindingisrobusttotheinclusionofregionaleconomicanddemographiccharacteristics,aswellastothepresenceofpre-existingmilitaryinstallations.Further,thisfindingonlyholdsfornavalspending,notforspendingfromotherbranchesofthemilitary.Ourfindingsthusproduce

supportfortheideathatofficerrepresentationgeneratedapullofattractiononfiscaldollarswhen those dollars suddenly became available. This naval spendingwas spread acrossmanyregionsoftheUnitedStates,buttendedtoflowtomoredepressedeconomicregionsthroughthispersonnelchannel.

THEPURCHASEOFBRITISHARMYCOMMISSIONS:

SIGNALLINGINADYNAMICMODELOFAPPOINTMENTANDPROMOTION

EstherRedmount,ColoradoCollege

ArthurSnow,UniversityofGeorgia

RonaldS.Warren,Jr.,UniversityofGeorgia

Abstract PriortoNovember1,1871,youngmenwhowantedtobeofficersintheBritishArmycould

purchasetheirregimentalcommissions.Anofficerboughtinatthebottomrung(ensign)ofthe

promotionladderandcouldmoveupthroughtherankstoLieutenantColonelbypurchasing

subsequentcommissions.

Wepositthatpurchasinganensign’scommissionwasawayofsignalinghighability.The

ensigncyitselfprovidedlittleopportunitytodoanythingotherthanroutinetasks,butoncethe

firstpromotiontolieutenantwasachieved,performanceinrankbecameareliableindicatorof

abilityandthecontrollingdeterminantoffurtherpromotions.Ifwagesandpromotion

guidelineswerethensetoptimally,purchasingfurthercommissionswouldbeofnovalue.If

thewagescalewasnotoptimal,thenpurchasingahigherrankcouldhavepositivevaluetoan

officer,hasteningadvancementtoearninghigherwages.Evidencethatpurchasingahigher

rankwasassociatedwithlesstimespentinthelowerrankwouldbeconsistentwitha

suboptimalwagescale.

Wesetoutamodelinwhichtheprobabilityofpromotionbeyondtheensigncymaybe

determinedbythepresenceofpurchasedsignals.Thelengthoftimespentinthelieutenancyis

predictedtobeshorterifthatoriginalcommissionwaspurchasedthanifitwasnot,ceteris

paribus.Forsubsequentpromotions,thedecisiontopurchaseacommission,andthusthe

socio-economicgroupwithwhichoneisassociated,shouldnolongermattersincethose

promotionsareexpectedtodependonperformanceindicators,assuminganoptimalwage

structure.

WetestthesepredictionsofthemodelwithdatadrawnfromthearchivesoftheBritishWar

OfficeandHart’sAnnualArmyList.Wehaveobservationsdrawnatthetimeoftheabolitionof

purchaseonthetimespentineachrankuptoLieutenantColonel,whetherrankspreviously

heldhadbeenpurchased,indicatorsofbravery,distinction,orothermeritoriousservice,the

locationofservice,whethertheofficerwasofaristocraticlineage,andwhetherornotthe

officerwasaveteranoftheCrimeanWar.Weestimatesurvivorfunctionsdetermining

separatelytheelapsedtimebetweenpromotiontolieutenantandpromotiontocaptainand

theelapsedtimebetweenpromotiontocaptainandpromotiontomajorasafunctionofthe

above-mentionedcovariates.Preliminaryestimatesareconsistentwiththepredictionsofthe

model.Lengthoftimetopromotionfromlieutenanttocaptainislowerforthosewhohad

purchasedanentry-levelcommission(totheensigncy),butthepurchaseofcommissionsto

subsequentrankshavenoeffect.Thetimespentasacaptainbeforepromotiontomajorisnot

affectedbythepurchaseoflowerranks;however,havingpurchasedtherankofmajorreduces

thetimetopromotiontothatrank,suggestingthatthewagedifferencebetweentheranksof

captainandmajorwasnotoptimal.

EscapingEurope:

HealthandHumanCapitalofHolocaustRefugees

MatthiasBlum,Queen’sUniversityBelfast

ClaudiaRei,VanderbiltUniversity

Abstract

AtEurope’sdoorstep,thecurrentrefugeecrisisposesconsiderablechallengestoworldleaders.Whetherrefugeesarebelievedbeneficialordetrimentaltofutureeconomicprospects,decisionsaboutthemareoftenbasedonunverifiedpriorsanduninformedopinions.Thereisavastbodyofscholarlyworkontheeconomicsofinternationalmigration,butwhenitcomestothesensitivetopicofwarrefugeesweusuallylearnabouttheoverallnumbersofthedisplacedbutknownexttonothingaboutthehumancapitalofthedisplacedpopulations.Ourstudycontributestothismuchunder-researched,andoftenhardtodocument,areaofinternationalmigrationbasedonanewlyconstructeddatasetofwarrefugeesfromEuropetotheUnitedStatesaftertheoutbreakofWorldWarII.

WeanalyzeHolocaustrefugeestravellingfromLisbontoNewYorkonsteamvesselsbetween1940and1942.Temporarily,thewarmadeLisbonthelastmajorportofdeparturewhenallotheroptionshadshutdown.EscapingEuropebefore1940wasdifficultbuttherewerestillseveralEuropeanportsprovidingregularpassengertraffictotheAmericas.TheexpansionofNaziGermanyin1940madeemigrationincreasinglydifficultandby1942itwasnearlyimpossibleforJewstoleaveEuropeduetomassdeportationstoconcentrationcampsintheEast.TheLisbonmigrantswerewartimerefugesandofferavaluableinsightintothelargerbodyofJewishmigrantswholeftEuropefromtheNaziseizureofpowerinGermanyinJanuaryof1933,totheinvasionofPolandinSeptemberof1939.

ThemajorityofmigrantsinourdatasetwereJewsfromGermanyandPoland,butweidentifymigrantsfrom17countriesinEurope.WedefineasrefugeesallJewishpassengersaswellastheirnon-Jewishfamilymemberstravelingwiththem.Usingindividualmicro-levelevidencewefindthatregardlessofrefugeestatusallmigrantswerepositivelyselected,thatis,theycarriedahigherlevelofhealthandhumancapitalwhencomparedtothepopulationsintheircountriesoforigin;thispatternisstrongerforfemalesthanmales.Furthermore,refugeesandnon-

refugeesinoursamplewerenodifferentintermsofskillsandincomelevel,buttheydiddifferwithrespecttothetimingofthemigrationdecision.Malerefugeesweremorepositivelyselectediftheymigratedearlier,whereaswomenmigratingearlierweremorepositivelyselectedregardlessofrefugeestatus.ThesefindingssuggestlargelossesofhumancapitalinEurope,especiallyfromwomen,sincetheNaziarrivalinpowersevenyearsbeforetheperiodweanalyzeinourdata.

ThestudyofthelateHolocaustrefugeesisratherrelevanttodayinthecontextoftheSyriancivilwar,whichbrokeoutsixyearsago.RefugeesfleeingSyriatodayarenotjustluckytoescape;theyareprobablyalsohealthierandcomingfromahighersocialbackgroundthanaverageintheirhomecountry.

ChurchbuildingandtheeconomyduringEurope’s

‘AgeoftheCathedrals’,700–15006

EltjoBuringh,UtrechtUniversity

BruceCampbell,Queen’sUniversityBelfastAukeRijpma,UtrechtUniversity

JanLuitenvanZanden,UtrechtUniversity

AbstractThispaperpresentsnewdataontheconstructionhistoryofabout1,100majorchurchesinWesternEuropebetween700and1500CE.Theideaisthatchurchbuildingcanbeseenasanindicatorofeconomicactivity,reflectingconfidenceinthefuture,commandofsubstantialecclesiasticalrevenues,mobilisationoflargeteamsofconstructionworkers,andanabilitytoassembleimpressivequantitiesofbuildingmaterialsatasinglesite,withthewidereconomicmultipliereffectsthatthisentailed.Inapiousage,Churchreform,monasticfoundationandadvancingarchitecturaltechnologyhelpedkick-startandthenlendmomentumtotheprocess.WhethersomuchconspicuousconstructionactivitywasbeneficialtooraburdenuponChristendom’srelativelypoorandunder-developedeconomycanbedebated.Whatisclearisthatchurches,likethebooksandmanuscriptsproducedinthesameperiod,areartefactsthatcanbequantified.Whereasharddataarelackingformanyotheraspectsofeconomicactivity,atleastbefore1250,researchbygenerationsofarchitecturalhistoriansmeansthatmuchisknownabouttheconstructionhistoryofindividualchurches,commencingwiththeiroriginalfoundation.PuttingthisinformationtogetherprovidesestimatesoftheecclesiasticalbuildingindustryforanumberofEuropeancountries,currentlySwitzerland,Germany,France,theLowCountriesandEnglandbutpotentiallyextendingtothewholeofLatinChristendom.Keyfindingsfromthisinvestigationareasfollows.First,afterthefalsestartoftheCarolingianRenaissance,theopeningphaseofthepost-c.920church-buildingboomappearstohavebeenconcentratedintheareabetweenRhineandSeinewhichisusuallylinkedtoclassicfeudalism,suggestingaconnectionwiththisnewsystemofexploitationofagricultural(andhuman)resourcesandmoreefficientextractionofsurpluses.Second,fromtheoutset,church-buildinginmaritimetownsdisplayedgreater

6Duby,Georges(1976),Letempsdescathédrales:l'artetlasociété(980-1420),Paris.

dynamismthanotherlocationsandafterc.1200thedisparitybetweenportsandlandlockedtownsbecameincreasinglypronounced,implyingthatcommercialfactorswereofgrowingimportance.Third,thebigboomhadrunitscoursebyc.1280andbythesecondquarterofthe14thcentury,aswarfareburgeonedandeconomicconditionstookaturnfortheworse,constructionactivitywasshrinkingalmosteverywhere,bothinaggregateandpercapita.Fourth,afterc.1350,thegravitationalcentreofchurchbuildingshiftednorth-eastwardsfromnorthernFranceandFlanderstotheNorthernLowCountriesandadjacentpartsofGermany,whichwerebenefitingfromtherealignmentoftraderoutesandprovingthemselvestobecommerciallyanddemographicallymoreresilienttothenegativeshocksofwar,commercialdeclineandplague.Fifth,thissuggestsaperiodizationofgrowth,inthesensethatinitially–duringtheCarolingianandOttonianRenaissances–agriculturalandinstitutionaldriversplayedalargeroleuntiltheyweregraduallysupersededbyinternationaltradeasthemoreimportantmotivatingfactor.Finally,thebreakbetweenc.960andc.1040(inEnglandafter1066)isthemoststrikingdiscontinuityinchurchbuilding.Changesinreligiousinstitutions—thestate-backedecclesiasticalreformmovementofthatperiod—areagoodcandidateforexplainingthissuddenbreak.

ACityofTradesandNetworks:SpanishandItalianImmigrantsinLate

NineteenthCenturyBuenosAires,ArgentinaLeticiaArroyoAbadDepartmentofEconomicsMiddleburyCollegeVermont,USA

BlancaSánchez-AlonsoDepartmentofEconomicsUniversidadCEU-SanPabloMadrid,Spain

AbstractDuringtheeraofmassmigrationtheUnitedStatesbecamethemaindestinationforEuropeanimmigrants;however,Argentinaattractedalargenumberofimmigrantsrelativetoitsownpopulation.BuenosAirescityretainedmorethan40%ofallurbanimmigrants.Thispaperbringstolightaratherextremecaseinimmigration:BuenosAirescityinthelatenineteenthcentury,wherelessthanonethirdofthelabourforcewasnative.Inparticular,welookatthemostimportantimmigrantgroups,theSpanishandtheItalians,incomparisontotheArgentineans.Thispaperaddressesanoldissueintheliteratureusingnewquantitativeevidence.OurcontributionliesinaquantitativeapproachtounderstandlabourmarketsinBuenosAiresandtoexploretheimportanceofethnicnetworksinfacilitatingtheimmigrantintegrationintothehostsociety.Wecompiledanewdatasettoanalysetheperformanceofimmigrantgroupsandtheimportanceofethnicnetworks.Basedonarandomsampleoftheoriginalrecordsofthe1895nationalcensus,weimputedearningstothefullrangeofoccupationsfromavarietyofsources.ThisisthefirstattempttoanalysetheArgentineanlabourmarketwitharichdatasetthatincludesIPUMS-basedoccupationclassification,incomeandindividualworkercharacteristicsinlatenineteenthcenturyBuenosAires.Inparticular,welookintothelabourmarketoutcomesofArgentineansandEuropeanimmigrantsindifferentdimensionsincludinglabourmarketparticipation,occupationandhumancapital.Wefindthat,onaverage,thenative-bornlabourforceenjoyedhigherwagesthantheimmigrantworkersasthemarketrewardedliteracy,experienceandknowledgeoftheSpanishlanguage.Overall,immigrantsinBuenosAiresconcentratedinoccupationswithlowerwagesthannatives.ItalianandSpanishearningswerearound20percentlowerthantheArgentineanlevel.However,earningdifferentialsareduemoretoclusteringinparticularoccupationalgroupsthanwithingroupvariation.Therelativeconcentrationindifferentoccupationswasnotevenlydistributed.Wefindspecialisationvianationality:Argentineshadagreaterparticipationinhigherskilledoccupationswhileimmigrantsconcentratedinlessskilledoccupations.SpaniardsdominatedtheretailsectorandItaliansthecrafts.HumancapitaldoesnotexplainthisspecializationpatternasbothSpaniardsandItalianshadrelativelyhighliteracyrates.Ourresultsindicatethatthisclusteringofimmigrantnationalgroupsinparticularoccupationsisdue,partly,tothepowerofimmigrantnetworks.Throughthenetworkchannel,theSpaniardsandItalianshelpedtheirfellowimmigrantsintegrateintothe

labourmarket,especiallyincertainoccupations.ThisstrategywasespeciallysuccessfulfortheItaliansasrevealedbyhigheraverageincome,inspiteoflowerliteracyratesthanSpaniardsorlackingthelanguageadvantage.Withdeeperandlong-establishednetworksinBuenosAires,theItalianshadthefirstmoveradvantage,abenefitthatpersisted,atleast,untiltheendofthe19thcentury.

Children’sGrowthinIndustrialisingJapan

EricSchneiderandKotaOgasawara

Abstract

Betweenthebirthcohortsofthe1880sand1980s,theaverageheightofJapaneseadultmenincreasedby13.9cm(BatenandBlum,2012).TheaverageWHOheight-for-ageZ-scoreofJapanesesixyearoldsintheperiod1929-39was-2.0,suggestingastuntingrateofaround50percentwhereastheaveragein2016was-0.46withamuchlowerstuntingrate.Thus,therewasaradicalchangeinthegrowthpatterninJapanacrossthetwentiethcentury,makingitanidealcaseforstudyingchangesinchildren’sgrowth.ThispaperusesJapanasacasestudyto analyse changes in children’s growth pattern and in their instantaneous growth in theinterwar period to determine how exposure to disease may have caused these changescontrollingforanumberofconfoundingfactors.

DrawingondatafromJapanesegovernmentreports,wehaveconstructedapaneldatasetcontainingtheaverageheightsofboysandgirlsforall47prefecturesfrom1929-39.Totesttheinfluenceofdiseaseonchildgrowth,weimplementtwostudydesigns.First,inordertomeasurethegrowthpatternofthechildren,wearethefirsttousetheSITARgrowthmodeldevelopedbyColeetal.(2008)toparameterisethegrowthpatternofhistoricalpopulations.SITARpredictsaparameter thatmeasures thesize, tempo (timingof thepubertalgrowthspurt)andvelocityofeachcohortgrowthcurveinourdataset.WethentakethepredictedSITAR parameters and use these as dependent variables in fixed effects regressions tounderstand how changes in health conditions in the year of birth affected each SITARparameter. There are implicit lags in these regressions, eliminating potential endogeneityproblems.Inoursecondstudydesign,weattempttounderstandhowchildmorbidity,proxiedbytheinfantmortalityrate,influencedtheinstantaneousgrowthofchildrenatages6to11.Weuseabilateral-specific fixedeffectsmodel,which includes fixedeffects forprefectureinteractedwith birth year, controlling for any differences in initial birth conditions of thechildrenacrossprefecturesandcohorts.Thereisgreaterpotentialforendogeneityintheseinstantaneousregressions,butbyfocusingonmortalityofyoungerchildren,especiallyinfantmortality,inthesameyear,weeliminatesomeofthisbias.

Briefly,we find thathealth conditions inearly lifedidnothavea strong influenceon thegrowth pattern of children in Japan. However, we do find a significant and economicallymeaningfuleffectoftheinfantmortalityrateonchildheightinthecurrentyearforbothboysandgirls.This suggests that childmorbiditywasvery important to the increase in statureduring interwar Japan, but it also suggests that the emphasis placed on preventing childstuntinginthefirstthousanddaysinthemoderndevelopmentliteraturemaybemisplaced.ThesecularincreaseinheightininterwarJapanwasmorestronglyinfluencedbycumulativeresponses to the health environment across development rather than being simply theoutcomeofimprovingcohorthealth.

TheimpactofcommutingandmasstransportontheLondonlabourmarket:

EvidencefromtheNewSurveyofLondonLifeandLabour

JessicaBean(DenisonUniversity);AndrewSeltzer(RoyalHolloway,LSE,IZA,CEH,ICS);JonathanWadsworth(RoyalHolloway,CEP,IZA,LOWER)

Abstract

Inmoderncities,commutingisanintegralpartofworkandinlargemetropolisesitisnotcommonforworkerstoaveragemorethananhourperdaycommuting.However,priortothedevelopmentofpublictransportationnetworks,workerstendedtoworkveryclosetohome,resultinginextremeover-crowdinginworkingclassneighbourhoods.Theconstructionofrail,subway,tramandbusnetworksallowedworkerstolivephysicallyseparatedfromtheirworkplace,andtochoosebetweenemployersoverawiderarea.Theoretically,publictransportationshouldincreaseearningsthroughtwoseparatemechanisms.First,byloweringsearchandcommutingcosts,itenablesworkerstotakehigherpaidjobsfurtherfromhome.Secondly,bywideningworkerssearchareasitimprovesworkers’bargainingpowerandreducesemployers’localmonopsonypower.

ThispaperexaminestheconsequencesofcommutingforLondon’slabourmarket,circa1930.WeusedatafromtheNewSurveyofLondonLifeandLabour,anapproximatelytwopercentsampleofLondon’sworkingclasspopulation.TheNewSurveycontainsinformationaboutindividualandhouseholdcharacteristics,occupation,hoursworked,andearnings.Importantlyforourpurposes,itcontainstwopiecesofinformationaboutcommuting:weeklyexpendituresonwork-relatedtransportandtheaddressesofworkers’homeandworkplace.WehaveobtainedGIScoordinatesforhomeandworkaddresses,andforLondonUndergroundstations,andusethesetocreatedistance-basedmeasuresofcentrality,accesstopublictransport,andcommuting.

Wehavetwomainempiricalresults.First,consistentwithsearchmodels,betteraccesstotheLondonUndergroundwasassociatedwithahigherprobabilityofcommutingmorethanonekilometrefromhome,andparticularlywithcommutingbetween3.2and19.5kilometres.Secondly,controllingforotherfactors,bothaccesstotheUndergroundanddistancecommutedwereassociatedwithhigherearnings.Weestimatethateachkilometrecommutedwasassociatedwitha0.4-0.9percentincreaseinearnings.Theestimatedeffectfornon-headsofhouseholdisapproximatelytwiceaslargeasthatofhouseholdheads.Inaddition,weestimatethataonekilometreincreaseinthedistancetothenearestLondonUndergroundstationreducedearningsbyontheorderof1.0percentforheadsofhouseholds,buthadnosignificanteffectonothers.

ALand‘ofMilkandButter’:

TheRoleofElitesfortheEconomicDevelopmentofDenmark

PeterSandholtJensen,UniversityofSouthernDenmarkMarkusLampe,ViennaUniversityofEconomicsandBusinessPaulSharp,UniversityofSouthernDenmark,CAGE,CEPRChristianSkovsgaard,UniversityofSouthernDenmark

Abstract

Asubstantialliteratureineconomicsexaminestheimpactofelitesonthegrowthtrajectoriesof

societiesacross timeandspacevia theireffectoneconomicandpolitical institutions,human

capitalformation,technologyadoptionandknowledgediffusion.Whiletheimpactoneconomic

andpoliticalinstitutionsiswell-established,theroleofelitesinknowledgediffusionisnotaswell

understood. In this paper,we shed new light on how elitesmay foster growth by being an

importantcatalystforthediffusionofknowledge.Wefocusonaspecificexamplecenteredon

Denmark, and the emergence of a modern dairy industry based on a new technology, the

automaticcreamseparator,andaninstitution,thecooperativecreamery,whichitiscommonly

agreedpropelledthecountrytowardsprosperityinthelastdecadesofthenineteenthcentury.

Animportantpointsurroundingthisdevelopmentistherapiditywithwhichithappened:after

thefoundationofthefirstcooperativecreameryin1882,withinadecadethewholecountrywas

covered. We argue that this was in fact the end result of a long period of agricultural

enlightenment, as amodern scientific formof agriculture spread into the country, propelled

initiallybyagroupofelitesontraditionallandedestates.

IntheDuchiesofSchleswigandHolstein,ruledbytheKingofDenmark inpersonalunion,an

intensifiedcroprotationsystemwithanimportantdairycomponentwasdevelopedonthelarge

manorialestatesknownasKoppelwirtschaft.ItbecamethedominantfieldsystemintheDuchies

inthe1700s,andincludedunprecedentedlylargeherdsofmilchcowsandtheinventionofan

innovativenewcentralizedsystemofbutterproduction,thehollænderi.Weshowinanarrative

account how this innovation came to Denmark during the 1760s and quickly increased in

importance. This adoptionwas unequal across the country, and led to an uneven spread of

emulationbycommonfarmers.Subsequentscientificdebateledtofurtheradvancesandmore

generally, itbecamefirmlyestablishedthatDenmark’scomparativeadvantage lay indairying,

andbutterproductioninparticular.

Wehavepreviously(LampeandSharpforthcoming)establishedanarrativeaccount–basedon

substantialuseofprimaryarchivalandothersources–ofhowthisinnovationspreadandtrickled

downtothepeasantrythrougheducation,research,diffusionofexamplesofbestpracticeand

the establishment of channels of marketing. Here we show econometrically that the pre-

existenceofspecializedestatedairies–introducedbytheelitesinthe1700s-hadacausaleffect

onthespreadofthecooperativesonehundredyearslater.Werelyonthepatternofdiffusion

ofKoppelwirtschaftwithdairyunitsfromtheoriginalplaceofintroductiontoestimateitscausal

effecton theestablishmentof cooperativesat theparish level.We thusquantify ina formal

econometricframeworkwhatwehavepreviouslyonlysuggestedqualitatively:thatthereason

fortheextremelyrapidspreadofcooperativecreameriesinDenmarkbetween1882and1890

canbeattributedtotheinnovationsintroducedbytheelitesfromSchleswigandHolsteinover

theprecedingcentury.

BankingNetworksandFinancialMarketIntegration:

ACaseofJapanduringtheLate19thCentury

MasatoShizume

WasedaUniversity

Abstract

Inthispaper,weexploretheeffectivenessofbankingnetworksinintegratingthenational

financialmarket.Wefocusonnetworksoperatedbyprivatebanksandthecentralbankin

Japanduringthelate19thcentury,whenitsfinancialsystemwasintheprocessof

modernization.Aftertheenforcedopeningofthetreatyportsinthe1850sandtheMeiji

Restorationin1868,thenewgovernmentmovedtoestablishmodernmonetaryandfinancial

systemswithsometrialanderror.Inthecourseofevents,thegovernmentintroduceda

multipleissuingbanksystembasedontheUSmodel.Theprivatesectorquicklyrespondedto

thegovernment’sinitiativebyformulatingamesh-likebankingnetwork.Thegovernmentthen

changeditspolicybyestablishingtheBankofJapan(BOJ)inabidtosupplanttheexisting

privatenetworkswithacentralbankingsystemofaEuropeanstyle.Asaresult,twotypesof

networksco-existedduringtheearlydaysoftheBOJ.Thispapershednewlightsonthe

processoftheintegration,especiallyduringtheearlystages,comparingtheeffectivenessof1)

networksoperatedexclusivelybyprivatebanksand2)thenetworkoperatedbythecentral

bankanditscorrespondentpartners.

Tothisend,Iconstructadatasetcomprisingthenumberofpair-wiserelationshipsamong

banks,andrelationshipsinmonthlylendinginterestratesattheprefecturallevel.Regression

analysesshowsthattheexistenceofbilateralrelationshipbetweenprivatebankshelpedto

convergeinterestratesbetweenprefectures,whereasthebilateralrelationshipbetweenthe

centralbankanditspartnersdidnot.Thissuggeststhatthenetworkofthenewcentralbank

didnotaddmuchtotheexistingnetworkoperatedbyprivatebanksintermsoffinancial

marketintegrationacrossprefectures.TheNetworkanalysisshowsthatthenetworkofthe

FirstNationalBank,whichhadthebiggestnetworkamongprivatebanks,haddenserandmore

closely-connectedstructurethanthatoftheBOJtofacilitatefundtransfer.Narrativeanalyses

revealthatprivatebanksformednetworksbycorrespondentcontractsandbranchingtoadjust

regionaldiscrepanciesofsupplyanddemandoffundsalongwithflowsofcommodities.The

banksconvergedinterestratesamongregionsthatotherwisewouldhavetendedtodivergeas

thevolumesofinterregionalcommoditytradegrew,causingdifferentpatternsofseasonaland

cyclicaldemandforfunds.Throughthisconvergingeffect,theprivatebankshelpedintegrate

thenationalfinancialmarket.TheBOJchangeditsstancetowardthefinancialmarketforthe

firsttimeafterfacingthebankingpanicof1890inOsakaandwesternJapan.Afterthepanic

thebankexpandeditsownnationalbranchnetworkandactivelyextendeditslending

operationsbyaddingcompanystockstoeligiblecollaterals,pavingthewaytoactasthelender

ofthelastresort(LLR)towardtheendofthecentury.TheBOJneededtimetolearntoplayits

roleasacentralbank.

Keywords:bankingnetwork,centralbank,financialmarketintegration,modernJapan

Wasthereamarriagepremiuminlatenineteenth-centurymanufacturing?

EvidencefromSweden

MariaStanfors,DeptofEconomicHistory,LundUniversity,Sweden

Abstract

Thatmarriedmenearnmorethanunmarriedpeersisawell-documentedphenomenonin

contemporarylabormarketsacrossWesternnations.Thepremiumiscommonlyfoundtobe

around10percent,thoughvaryacrosssettings.Fewstudieshave,however,documented

themarriagepremiuminthepast.Thereasonsforwhythereisamarriagepremiumisnot

equallywellunderstood.Themostcommonexplanationisthatmarriagemakemenmore

productive,thoughcompetingexplanationsarguethatmarriedmenaremoreproductive

alreadybeforetheymarryandthatthepremiumisduetoselection.Thereisalsothe

argumentthatmarriedmenaresubjecttopreferentialtreatmentbyemployerswhovalue

themoradheretosocietalnormsregardingmen’sbreadwinningresponsibilities.Againstthis

backdrop,onemayanticipatetofindarathersubstantialmarriagepremiumamong

industrialworkersinthepast.

Weinvestigateiftherewasamarriagepremiumamongmaleworkers,exploitingmatched

employer-employeedatafromtheSwedishcigarandprintingindustrycirca1900.Thedata

providesdetailedinformationonindividualcharacteristicsforworkersholdingthesamejobs

andalsomanycharacteristicsofthefirm.Wearetherebyabletocontrolforfactorsbothat

theindividualandworkplacelevel.Toanswerourresearchquestions,weestimatestandard

wageregressionsconsideringindividualcharacteristicsforearnings,butalsooccupation/skill

andfirm-levelcharacteristics.

Wedidnotfindmuchevidenceforamarriagepremiuminthepastandsuggestthat

previousclaimsaboutthefamilywageandhowinstitutionssuchasunionmembership

supportedthis,needtoberevised.Thereweresizeablerawmarriagepremiainboththe

cigarindustryandamongcompositors.Evenwhencontrollingforproductivity-related

individualcharacteristicssuchasage,experienceandtenure,weobservedpremiaaround10

logpoints,whichisinlinewithpreviousfindingsforcontemporarysettings.Themore

observableswecontrolledfor,thesmallerthegaps,totheextentthatthemarriage

premiumdisappearedamongcigarmakers.Themarriagepremiumwasmoresubstantial

amongcompositors,andforthisgrouppreviouslymarriedmenearnedanevenlarger

premium.Whencontrollingforunobservableheterogeneityatthefirmlevel,i.e.,policies

andpracticeswithrespecttomanagementandworkorganization,whichpreviouslyhas

beenneglected,themarriagepremiumre-appearedamongcigarmakers,evenamongthose

whowerepaidpieceratesandwereremuneratedaccordingtoproductivity.Marriedcigar

makersearnedmore,notbecausetheyworkedforbetter-payingfirmsorinbetter-paying

jobsbutbecausetheyworkedhardermostlikelyduetotheirbreadwinningresponsibilities.

Whilethemarriagepremiumwasassociatedtoworkeffortamongcigarmakers,thiswasnot

thecaseforcompositorswheretheresultsmoresupportahumancapitalstoryor

potentiallytheemergenceofdifferentialtreatmentinfavorofmarriedmen.Ourresultsput

previousclaimsintoperspectiveandshowsthatsomeassociationsdonotholdupforcloser

scrutiny.

AGiftofHealth:

TheDukeEndowment’sImpactonHealthCareintheCarolinas:1925-1940

AlexHollingsworth,IndianaUniversityMelissaA.Thomasson,MiamiUniversityandNBER

Abstract

In1924,JamesBuchananDukeestablishedtheDukeEndowmentwithagiftof$40million.AmongthebeneficiariesoftheDukeEndowmentwerehospitalsinNorthCarolinaandSouthCarolina,whichDukeviewedas“…indispensableinstitutions[for]ministeringtothecomfortofthesick[and]inincreasingtheefficiencyofmankindandprolonginghumanlife”(IndentureofTrustoftheDukeEndowment,1924).Overtheperiod1926-1940,theendowmentfunnelednearly$14millioninfundstohospitalsintheCarolinas.Fundswerefirstusedtoreimbursehospitals(upto$1perday)forgivingpatientsfreecare.Surplusamountscouldbeusedforhospitalconstructionandmaintenance.WhentheDukeEndowmentbeganitsprogram,roughlyone-halfofNorthCarolina’s100countieshadnohospitalbeds.Atthebeginningofouranalysisin1927,therewere7,679bedsingeneralhospitalsinNorthandSouthCarolina.Inthelastyearofouranalysis,thisnumberhadrisento11,117.HowmuchofthisincreasecanbeattributedtotheeffortsoftheDukeEndowment?PreliminaryanalysissuggeststhatDukeEndowmentcontributionsaccountedfor2,590ofthebeds–orabout23.3percent.WealsoexaminetheimpactofDukeEndowmentspendingonhealthoutcomesinNorthCarolina.WefindthatDukeEndowmentspendingdidnotreduceoverallmortalityuntilaftertheadventofsulfain1937.However,aftertheintroductionofsulfa,DukeEndowmentcontributionsdidreduceall-causemortality.Specifically,wefindthataonestandarddeviationincreaseinfreedaysper1,000ledtoa24.17percentreductioninmortality.IntheIndentureofTrustfortheDukeEndowment,JamesB.DukewasveryclearthatmoneyfromtheEndowmentwastobeusedtofundhospitalsforwhitesandblacks.Thedatasuggestthatblackhospitalsreceivedlessoverallfundsthanwhitehospitals,butthatblacksbenefitedmorefromsubsidizedcareprovidedbytheDukeEndowment.Thisspendingstatisticallysignificantlyreducedtheblack-whitemortalitydifferential:withadecreaseintheblack-whitemortalitygapof8.1percentinthepre-sulfaperiodand12.5percentinthepost-sulfaperiod.

TheOldMenintheCensus:

InequalityandMobilityin18thCenturyMurcia

Jose-AntonioEspin-Sanchez(YaleUniversity)SalvadorGil-Guirado(UniversityofMurcia)

ChrisVickers(AuburnUniversity)

Abstract

WemeasureandanalyzeinequalityandsocialmobilityinMurcia(Spain)duringthe18thcentury,aperiodthatcoversthepre-industrialworldaswellastheveryearlystagesofindustrializationinEurope.Therecordsweuseallowustostudysocialmobilitywithafocusonwomenandtheirrelationtotheirchildrenandspouses.Asamethodologicalcontribution,weproposeanewestimationmethodusingtheinformationinthesefamilytreestoindependentlyidentifythreeparameters:theeffectofthefatheronthechild,theeffectofthemotheronthechildandthedegreeofassortativemating.Thevoluminousliteratureonintergenerationalmobilityhasgenerallyreliedonfather-sonlinks,largelyforreasonsofdataavailability.Morerecently,economistshaveextendedtheanalysistomorecomplexfamilydynamics.Inthispaper,weconstructindividuallinksformultiplegenerationslinkingbaptismalrecordswithcensusesdata(MiliciasCensusof1734,EnsenadaCensusof1756andFloridablancaCensusof1786).Thatis,becauseourbaptismalrecordscontaininformationaboutthenamesofthebaptizedindividual,theparents,aswellasallfourgrandparents,wecanconstructfourmalelinksfromthebaptismrecordstothecensuses:theson,thefather,aswellasbothgrandfathers.Importantly,linkingthematernalgrandfatherallowsustoconstructanestimateofthetransmissionofstatusfromthemothertothesonwithoutactuallylinkinghertoanycensusrecords.Ontheotherhand,thecensusesgiveusinformationonthestructureandcompositionofeachhousehold,aswellasdataonincomeandoccupationsofhouseholdheads.Withtheconstructedfamilytrees,wecanstudystatustransmissionfromboththefatherandthemothertoallchildreninthehousehold.Iftheunobservedcharacteristicsofthemotherhaveadirecteffectonthecharacteristicsoftheson,thentheobservedcorrelationbetweenthecharacteristicsofthefatherandthesonisthesumoftwoeffects.Thefirsteffectisthedirecteffectofthefatherontheson.Thesecondeffectistheindirecteffectofthefatheron

theson,whichistheproductofthedegreeofassortativematingandthedirecteffectofthemotherontheson.Usinginformationonthegrandparents,weconstructaGMMestimatortocorrectfortheseproblems.Inadditiontostudyingsocialmobility,weexamineinequalityandhowthatchangesovertimeusingthefullpopulationdata.Weobservenochangeininequalityfrom1734to1756.Weobserveasmallincreaseininequalityfrom1756to1786duetoarelativedecreaseinincomeinthethirdandfourthquintiles.TheeffectisconsistentwiththeKuznetshypothesisthattheearlystagesofindustrializationincreasesinequalitybyreducingthenumberofartisanjobswhileincreasingthenumberoflaborersandtheincomeofcapitalists.1786isstillearlyforindustrializationinMurciaandtheeffectisstillsmallby1786.

NewsMediaandStockMarketReturnsovertheLongRun7

AlanHanna

(Queen’sUniversityBelfast)

JohnD.Turner(Queen’sUniversityBelfast)

CliveB.Walker

(Queen’sUniversityBelfast)

AbstractDoesthenewsmediaaffect financialmarkets? In thispaper,weexaminetherelationshipbetweenthecontentoftheFinancialTimes(FT)andreturnsontheLondonStockExchangefor theperiod1899–2010usinganewdailystock-market index.Todothis,weconverted350,000articlesintotextfilesusingOCRsoftwareandthenassessedthepositiveandnegativesentimentofeacharticlebyusingtheLoughranandMcDonald(2011)dictionary.WeusethefactthattheFT’shistoricalarchivecategorisesitscontentintosectionstotestwhethertheinfluenceofthemediaonthemarketvarieswiththetypeofreporting.Wethenuseanovelidentificationmethodthatclassifiesthemarketaseitherbeinginabullorbearstatetotestwhat typeof reporting contributes to theprevailingmarket state.Whenwe consider theentirenewspaper,wefindthatthereisarelationshipbetweensentimentandreturns.Ouranalysis of the FT’s sections suggests that news onmarket performance has a significantimpactonfuturereturns.However,thisisthefirstpapertofindthatthesentimentofnon-market news and commentary also has an impact on returns. This is consistent with abehaviouralmechanismwherenewsthatisreadbytraderscreatesashort-termbiasintheiractions.Whenwe lookat resultsby thestateof themarket,we find thatnews reportingaffectsreturnsinbothbullandbearmarkets,butFTcommentaryonlyhasaneffectinbearmarkets.Weinterpretthisasevidencethattradersturntocommentaryduringbearmarketstounderstandbetterthefactorscausingthedownturn.

7 Thanks to Gareth Campbell for help with the Investor’s Monthly Manual data.

TheMarginalChildthroughouttheLifeCycle:EvidencefromEarlyLawVariation

JoannaN.Lahey---TexasA&[email protected].

MarianneH.Wanamaker---UniversityofTennessee,NBER,andIZA

ElizabethOltmansAnanat---DukeUniversityandNBER

Abstract

Arobustliteratureexaminestheeffectsof“wantedness”onchildoutcomes,utilizingchangesin

abortionlawsinthelate20thcenturyforidentification.Theunderlyingtheory,however,predicts

that some effects of early life circumstancesmay notmanifest until older ages. Theories of

“scarring” indicate unwanted children may be weaker and less well-adapted to their

environments, and evidenceof thismaybe apparent soon after birth.On the other hand, if

unwantednessproducesaselectioneffectwhereinstrongermembersofthecohortsurvive,the

long-runeffectmaybehigherconditionallifeexpectanciesatolderages.Weexploitvariationin

19thcenturyabortion-relatedlegalrestrictionsbetweenU.S.statesandovertimewithinstates

toexaminetheeffectofchild"wantedness"ontheoutcomesofchildrenovertheirlifecycles,

fromearlyagesthroughtheoldestold.Theadoptionoftheselegalrestrictionsisnotpredicted

byotherchangesinstatecircumstances,andstateswithanti-abortionlawshavebetween4and

15percentmorechildrenthanthosewithout.Consistentwiththeoriesofscarring,membersof

theselargercohortswereroughly3percentlesslikelythanthoseinothercohortstosurviveinto

theirtwentiesandthirties.

Butwealsodetectalong-runselectioneffect;thesecohortmembersare3-6percentmorelikely

tosurvive intotheir70sconditionalonreachingage60.Ourresultsaresimilar formalesand

females.Wealsodetectreductionsinlaborforceparticipationandemploymentratesamongst

members of these larger cohorts, which make the positive longevity effects all the more

remarkable.Ourresultsarerobusttovariousspecificationchecksandindicatethatwantedness,

likeotheraspectsofachild’searlylifecircumstances,hasimportanteffectsonlifeexpectancy,

albeitwithdifferentsignsoverthelifecycle.Futureworkwilluse100%censussamplesandcause

ofdeathdatatoconfirmtheseeffectsandtoexplorespecificpathways.

TheNot-So-HotMeltingPot:ThePersistenceofOutcomesforDescendantsof

theAgeofMassMigration

ZacharyWardAustralianNationalUniversity

Abstract

Today’simmigrantsfrompoorersourcecountrieslagbehindnativeincomelevels,leadingto

substantialpoliticalinterestintheireventualeconomicassimilation(Borjas,2015;Lubotsky,

2007).Thisincomeimbalanceisnotlimitedtoimmigrantsthemselves;pooroutcomesmay

continue for the children and grandchildren of the first generation, leading to persistent

generationalpoverty.Ultimately,itisunclearhowlongitwilltakeforrecentimmigrantsand

theirdescendantstoovercomelowstartingpointsandreachconvergencewithnatives.

Convergencepastthesecondgenerationisunclearduetoalackofdata.Thebestsourcescan

only identify the first and second generations becauseUnited States data do not contain

grandparent’scountryofbirth,leavingadultoutcomesforthethirdgenerationunobserved.

Insteadof grandparent’s countryof birth, a large literature classifies the third generation

using self-reported ancestry or surnames; however, these methods suffer from either

selectiveself-identificationormaternalsurnamechangeaftermarriage.

InthisstudyIcreateauniquedatasetthatincludeallfourgrandparents’countriesofbirthfor

over twomillionadultsobserved in the1940UnitedStatesCensus. Thenewdata canbe

createdduetotwofeaturesofhistoricalrecords.First,the1910censusaskedformother’s

andfather’sbirthplace,allowingmetoobserveallfourgrandparents’birthplaceforchildren

ofintactfamilies.Second,whileotherswhousethismethodcanonlyobserveoutcomesfor

childrenstill inthehousehold,withpublicallyreleasedhistoricalcensusesIamabletolink

childrentotheiradultoutcomes30yearslaterandobservekeyoutcomessuchasoccupation,

yearsofcompletededucation,incomeandrealestatewealth.Thisnewdatasetprovidesclean

identificationofthegrandchildrenoffirst-generationimmigrants,whichallowsmetogoone

generationfurtherthanthepriorliterature.

Ifindthatconvergencebetweensourcecountrieswasslow,slowerthanpreviouslyestimated

intheliterature.Thecorrelationbetweenthefirstandthirdgenerations’averageskilllevels

isbetween0.44and0.48;thissuggeststhatforagivenskillgapbetweentwooriginsin1880,

alittleoverhalfhaddisappeared60yearslater.Theresultssuggestthatgroup-leveleffects

suchassocialcapital,discriminationorethnicenclavesoperatenotonlyforthelinkbetween

the first and second generations, but also for the link between the second and third

generations.Therefore,thefirst-generation’seconomicpositionhasalong-lastinginfluence

onfuturegenerations.

However,Ialsofindthatthegrandchildrenoffirstgenerationmigrantsoutperformthosewith

fourAmerican-borngrandparentsonnearlyeveryeconomicmeasure in the1940Census.

Immigrant descendants have higher years of education, more income, higher-paid

occupations,andhigherhousingwealth.Thisisconsistentwithalong-runpositiveimpactof

theAgeofMassMigrationonAmericanoutcomes.

AssetPricinginOldRegimeFrance

D.LeBris

ToulouseBusinessSchool

W.GoetzmannYaleUniversity

S.Pouget

ToulouseSchoolofEconomics

M.WavasseurToulouseUniversity

Abstract

Inthisstudy,weexaminetheToulousemillcompanies,theoldestshareholdingcorporations

knowninEurope,totestassetpricingmodels.Wecollecteddataondividendsandshare

pricesfortheHonordelBazacleandtheNarbonnaisCastlefrom1591to1788.Thetotal

milledgrainquantityinToulousewasalsousedtobuildaproxyforlocalconsumption.In

accordancewiththeconsumption-basedassetpricingtheory,wedescribethepricesby

usingastochasticdiscountfactor(SDF)intheEulerequation.Morespecifically,we

decomposetheSDFintoanobservablecomponentandanunobservableone(Julliardetal.

2016),andweperformedarelativeentropyanalysistoestimatethepricingkernelofthe

economyparametricallyandnon-parametrically.Weobservethatthemodel-freeSDF

correlateswiththemodel-impliedoneandwithconsumption.Aconstantrelativerisk

aversion(CRRA)-basedmodelwithpowerutilityisnotrejectedbythedataforverylowrisk

aversionlevels,andsomeclassicissuesinfinance,suchastheequitypremiumpuzzle,donot

arisethankstohighconsumptiongrowthvolatility.

UNREALWAGES?

REALINCOMEANDECONOMICGROWTHINENGLAND,1260-18508

JaneHumphriesUniversityofOxford

JacobWeisdorf

UniversityofSouthernDenmarkandCEPR

Abstract

Existingaccountsofworkers’earningsinthepastsufferfromthefundamentalproblemthatannual

incomesareestimatedonthebasisofdaywageswithoutknowingthelengthoftheworkingyear.

Wecircumventthisproblembypresentinganovel incomeseriesformaleworkersemployedon

annualcontracts.Weuseevidenceoflabourmarketarbitragetoarguethatexistingestimatesof

annualincomesinEnglandarebadlyofftarget,becausetheyoverestimatethemedievalworking

year but underestimate the working year during the industrial revolution. Our new income

estimates suggest that modern economic growth began more than two centuries earlier than

commonlythoughtandwasdrivenbyanearlyandcontinuing‘IndustriousRevolution’.

8WethankBruceCampbell,TommyBengtsson,SteveBroadberry,GregClark,JandeVries,SaraHorrell,JohnHatcher,NunoPalma,EricSchneider,JaimeReis,MauroRota,JacobSoll,MichelangeloVasta,aswellastheconferenceandseminarparticipantsatthe1stSoundforSeniorsWorkshop,the17thWorldEconomicHistoryCongress,theEconomicHistorySocietyAnnualConference2016,theLindaandHarlanMartensEconomicHistoryForum,‘TheFirstModernEconomy:GoldenAgeHollandandtheWorkofJandeVries’attheHuntingtonEarlyModernStudiesInstitute,UniversityofSouthernCalifornia,2017,andseminarparticipantsattheUniversityofSiena,theUniversityofValencia,theSant’AnnaSchoolofAdvancedStudiesinPisa,theEuropeanUniversityInstituteinFlorence,andUtrechtUniversityfortheirhelpfulcommentsandsuggestions.WearegratefultoJacobFieldandRoderickFloudforsharingdata.Forthefullversionofthispaper,pleasevisit:https://jacobweisdorf.wordpress.com/ongoing/.

AustralianSquatters,Convicts,andCapitalists:

DividingUpaFast-GrowingFrontierPie1821-1871

LauraPanza(Melbourne)JeffreyG.Williamson(HarvardandWisconsin)

Abstract

Compared with its nineteenth century competitors, Australian GDP per worker grew

exceptionally fast,abouttwicethatof theUSandthreetimesthatofBritain.Thispaperasks

whetherthefastgrowthperformanceproducedrisinginequality.Usinganoveldatasetweoffer

new evidence supporting unambiguously the view that, in sharp contrast with US, Australia

underwent a revolutionary leveling in incomes between the 1820s and the 1870s. This

assessment is based on our annual estimates of functional shares in the formof land rents,

convict incomes, free unskilled incomes, free skill premiums, British imperial transfers and a

capitalistresidual.

Keywords:ColonialAustralia,inequality,growth,functionaldistributionJEL:N17,N37,O47,O56

Long-RunConsequencesofExposuretoInfluenzaat

Birth:Zurich1889/1890

JoëlFloris,SonjaGlaab-SeuckenandUlrichWoitek

DepartmentofEconomics,UniversityofZurich

Abstract

Anincreasingnumberofstudiesshowsnegativelong-runeffectsof

adverseearlylifeconditionsoneducationalachievement,labor

marketoutcomes,morbidityormortalitylaterinlife.Aunique

datasetforZurichrecruitsexaminedbeforetheoutbreakofthe

FirstWorldWarallowsustolookatchannelsfortheseeffectsina

historicalcontext:inadditiontoindividualinformationonbody

measurements,wealsohavedataonphysicalandintellectual

fitnessatageofrecruitment,measuredbytheperformanceata

sportstestandthepedagogicalexamination.Theliteratureonthe

long-runeffectsofinfluenzashowsthatpregantwomenare

especiallyvulnerableandthatthechannelthroughwhichthefetus

isaffectedisnotadirectviraleffectbuttheinflammatory

responseofthemother.Thishaspotentiallylong-runeffectson

theindividual.Thereisabodyofresearchontheconsequencesof

theSpanishFlu1918/19,whichwecannotstudy,giventhatthe

recruitsinthedatesetwereborninthe19thCentury.Butsomeof

therecruitswereexposedtoaninfluenzapandemicatbirth,theso

calledAsiaticorRussianFlu1889-1890.

Thelargest19thCenturypandemicbrokeoutinthewinterof

1889/1890andwascharacterizedbywavelikerecurrencesinthe

succeedingyears.SimilarlytotheSpanishFlu,1890sawanincreasein

theproportionofdeathsintheagegroup20-40years.Otherthanin

therestofEurope,wheretheepidemicspreadfromtheNortheastto

theSouthwest,itarrivedinSwitzerlandintheWestinNovember1889

andspreadquicklyacrossthecantonsFirstcasesforthecityofZurich

werereportedattheendofNovember/beginningofDecember.The

overallpeakofthenumberofdeadwasJanuary1890,followedby

outbreaksinApril/May1893andJanuary1894.ForZurich,estimates

forthenumberofinfectedpersonsrangebetween%20and%70.We

findthattherecruitspotentiallyaffectedinuterobythesewaveswere

about0.5cmsmallerthantheothers,andshowedareduced

performanceinthepedagogicalexaminations,especiallywithrespect

toreadingandessaywriting.Ontheotherhand,physicalabilitiesdid

notreacttotheexposure.

TOWARDSAQUANTITATIVEASSESSMENTOFTHETRANSFORMATIONOFWORKFORCEINTHE

COURSEOFCHINA’SINDUSTRIALIZATIONANDURBANIZATION,1912-2012

HarryX.WuInstituteofEconomicResearch,HitotsubashiUniversity,Tokyo

ABSTRACT

Thispaperattemptstoconstructacentury-longtimeseriesofemploymentaccountsforChinato facilitate research on China’s long-run growth, especially China’s industrialization andurbanizationsincetheturnofthetwentiethcentury.Ourdataisconductedintimeandspaceunder a framework of economy-wide labor supply and demand in real terms to ensure asystematicandconsistentdatahandling.Forthepre-1949republicanera,werevisetheexistingestimates for the 1933 benchmark and construct accounts for the 1915 benchmark and theaverageof1949-1952aimingtoanchortheestimatedtimeseries.Forthepost-1949communisterawe re-construct the existing official employment series up to 2012with adjustments forworkers engaged in handicrafts and secondary jobs and inconsistentworking hours. Besides,usingreconstructedcensusdata,weestablishthelaborsupply-sideaccounts,i.e.total,working-age and economically participated populations, to assess the available demand-side data togaugetherateofunemploymentovertime.And,weusefactoryandserviceemploymentdatatoassess thecensusandhouseholddataon the locationof residents toestimate the rateofChina’surbanization.

WeshowthatChina’scentury-long labor transformationbeganwithabroadstructureof theprimary,secondaryandtertiarysectorsin1912as82.2,8.1and9.7percent,respectively,oftheentireworkforceandendedin2012,onecenturylater,withadistinctstructureof35.7,28.4and35.9 percent of theworkforce.Meanwhile, China’s urbanization rate rose from 10.7 to 51.9percent.Bothwerenonethelessbynomeanssmooth.TheywereinterruptedbytheWWII,theChinese Civil War, the 1949 Communist Revolution, as well as post-1949 numerous radicalpoliticalandeconomiccampaignsuptoMao’sdeath.Asaresultoftheseshocks,bytheearly1960sthestructurealmostreversedtoitsinitiallevelsin1912.Itwasclearlythemarket-orientedreformsinthe1980sthatreinitiatedandthenacceleratedthelaborforcetransformationandurbanizationinChina.

Inthisexercise,wealsoestimatedChina’slaborparticipationratesfortheavailablebenchmarks,whichwereunusuallyhigh, ranging from82 to87percentof theworking-agepopulation––atypicallow-incomecountryphenomenonthathassurprisinglynotchangedalongwiththerapidincome growth, and use the rates to link the demand-side with the supply-side to explorecoherentlyChina’srateofunemploymentovertime.

Key words: Occupation; by-employment; working-age population; labor participation rate;unemployment;urbanization

JELclassification:C82,E24,O47

TheEffectofImmigrationQuotasonWages,theGreatBlackMigration,andIndustryDevelopment

BinXie

RutgersUniversityandIZA

Abstract

Thispaperusesanaturalexperimenttoidentifytheeffectofimmigrationonthe

manufacturingwages,theGreatBlackMigration,andthemanufacturingindustry

developmentintheUSbetween1920and1930.Theimmigrationquotasystem

establishedin1921and1924intheUSsetquotasforimmigrantsfromeachsending

countryproportionaltothehistoricalCensuspopulationbase.Bydesignthequotas

assignedtosouthernandeasternEuropeancountrieswerehighlydeficientincontrast

togenerousquotasassignedtowesternandnorthernEuropeancountries.Thusthe

quotasystemseverelyrestrictedimmigrantsfromsouthernandeasternEuropewhile

imposingmodestrestrictionsonimmigrationfromwesternandnorthernEuropean

countries.USregionsthatwerehistoricallymajordestinationsofeasternandsouthern

Europeanimmigrantsexperiencedagreaterexogenousdeclineinimmigrantsupply

comparedtoregionsthatusedtohavemoreimmigrantsfromless-restrictedcountries.

AccordinglyIestimatethetotalnumberofexcludedimmigrantsfromeachsending

EuropeancountryastheinstrumentalvariableforthechangeinimmigrantshareinUS

regionsbetween1920and1930.Iusetheannualimmigrantinflowfrom1879to1914

toprojecteachcountry’s“noquota”counterfactualimmigrantinflowtotheUSfrom

1915to1930andcalculatethedifferencebetweenthecounterfactualsandtheactual

quotas.ThenIapportionexcludedimmigrantstoeachUSregionbasedontheir

settlementpatternsin1900countrybycountrytoobtaintheaggregatednumberof

immigrantsexcludedbythequotasysteminthisdecadetoeachUSregion.Iusethe

excludedimmigrantsnormalizedbytheregionalpopulationastheinstrumentalvariable

fortheactualchangeintheimmigrantsharebetween1920and1930inthefirst-

differencecounty-levelregressions.

TheIVestimatesshowthatthenegativeimmigrantsupplyshocktoaregionsignificantly

increasesthelocalmanufacturingwagelevel.A1-percentage-pointdeclineinimmigrant

shareliftsthemanufacturingwagebyabout2percent.Theresultsrevealacausal

relationshipbetweentheimmigrationquotasandtheGreatBlackMigrationthatthe

regionswithagreaterreductionofimmigrantsupplyexperienceastrongerinflowofthe

blackpopulation.Theresponsivemigratoryblackpopulationisrelativelyyoung,literate,

andunskilled.Ialsofindthatmanufacturersfacinglessimmigrantsupplyaremorelikely

toshifttowardcapital-intensiveproduction,indicatedbyhigherhorsepowerperlaborer

andvaluedaddedperlaborer.Meanwhiletheyhaveaslowergrowthintermsoffirm

sizeandelectrificationratio.

LinguisticBarrierstoStateCapacityandIdeology:

EvidencefromtheCulturalRevolution

SusanOuandHeyuXiong

AbstractInthispaperweutilizeapreviouslyunexploredinstitutionaldetailofawidelystudiedhistoricalphenomenon,theChineseCulturalRevolution,tostudythecausalimpactofstatesponsoredpropagandaoncollectiveconflictandlongtermindividualoutcomes.TheChineseCulturalRevolution(1966-1976)wasaperiodofcollectiveviolenceandpoliticalrepression.Themovementwasfosteredbythehighlypoliticizedrhetoricfromstatesponsoredmedia.Onetypeofpropagandawasradiobroadcastsfromcentralizedloudspeakerslocatedintowncenters.Thesebroadcastswereubiquitousandanunavoidablefeatureofeverydaylife.TheCommunistPartyinvestedheavilyinradioinfrastructure,creatingawayinwhichitcouldquicklyanddirectlyreachallitsconstituents,evenpeasantslivingintheremotecountryside.Whilethepresenceofthepropagandawaspervasive,thecomprehensionandreceptionofthemessagewasnotuniform.Itwasmandatedthatallstatepropagandabeconductedintheofficialpartylanguage:StandardMandarin.Asaresult,thepropagandaeffortwasmutedinareaswhosepeopledidnotcomprehendStandardMandarin.Weexploitthisinstitutionaldetailtocreateanovelintensityoftreatmentmeasure.ThisenablesustodeterminethecontemporaneouseffectofpropagandaontheintensityoftheCulturalRevolution,aswellashowthisdifferentialexposuretoCulturalRevolutionideologyaffectsthelongtermoutcomesofindividuals.Ourfirstmaincontributionisdevelopingawayinwhichtoquantifytheintensityofexposuretopropaganda.Weusearchivaldatatodocumentthelocationofradiostationsatthetime,whichdeterminesthedensityoflocalbroadcastinginfrastructure.Weconstructameasureofexposurebasedontheinteractionofprovincialradiodensityandthelocaldialect’smutualintelligibilitywithStandardMandarin.WeexaminetherelationshipbetweenthisinteractiontermandtheintensityoftheCulturalRevolutionineachcountyasmeasuredbythenumberofkillingsdirectlyattributabletotheCulturalRevolution.Wefindthatwhilethepresenceofradioincreasedthelevelofviolencelocally,theeffectwasespeciallypronouncedinlocationswhereMandarinwasmorewidelyunderstood.Theresultshighlightapersistenttensionfacedbythestate,betweeneffectiveadministrationandcentralizationofpolicy.TheCommunistPartyinChinaconductedallpartypropagandainMandarininordertocombatlocalismandtotrytounitethecountry.However,thispolicywas

atoddswiththegoalofspreadingideologyamongthelinguisticallyheterogeneousstate.Ironically,thelanguagebarriertostatecapacityduringtheCulturalRevolutionconstrainedtheintensityandexcessoftheviolence.Normativeimplicationsaside,ourresultsprovideacontextforwhylinguisticstandardizationisoftenanimplicitorexplicitpolicyinthestatebuildingstrategyofgovernments.Ontheindividuallevel,wediscoverthatnativeMandarinspeakersoftheimpressionableagegroupatthestartofCulturalRevolutionparticipatedmoreinrevolutionaryactivities.Namely,wefindthatwithinthesamecounties,individualswhounderstoodMandarinweresignificantlymorelikelytojointheSentDownmovementandaffiliatewiththeCommunistpartyevencontrollingforparentalandindividualcharacteristics.Thisunderscoresamechanismthroughwhichpropagandaoperated.

Railroads,TechnologyAdoption,andModernEconomicDevelopment:EvidencefromJapan

JunichiYamasaki∗

Abstract

DepartmentofEconomics,LondonSchoolofEconomicsandPoliticalScienceRailroad

accesscanacceleratethetechnologicalprogressintheindustrialsectorandtherefore

inducestructuralchangeandurbanization,thetwocommonfeaturesofmodern

economicgrowth.IexaminethisparticularmechanisminthecontextofJapanese

railroadnetworkexpansionandmoderneconomicgrowthinthelate19thcenturyand

early20thcenturies.Bydigitizinganoveldatasetthatmeasurestheuseofsteam

enginesatthefactorylevel,allowingmetodirectlyobservethediffusionofsteam

power,Ianalyzetheeffectofrailroadaccessontheadoptionofsteampower.To

overcometheendogeneityproblem,Ideterminethecost-minimizingpathbetween

destinations,andusethistoconstructaninstrumentforrailroadaccess,becausethe

networkingmotivationtoconnectdestinationswillbeexogenoustolocaleconomy,

conditionalonlocalcontrols.

Ifindthatrailroadaccessledtoanincreasedadoptionofsteampowerbyfactories.My

Difference-in-DifferencewithIVestimatesimpliesthathavingrailroadaccessby1892

ledtoanincreaseinsteampowerofabout300horsepoweratthecountylevel

between1888and1902.Additionally,Ialsofindtheeffectofrailroadonstructural

changeandurbanization.Conditionalontheshareofpopulationworkinginthe

agriculturalsectorin1885,Ifindthatearlyadoptershavea6.7percentlowershareof

workersintheprimarysector.Railroadnetworkalsobrokemeanreversionin

populationgrowth,eventuallyleadingtourbanization.Ifindthatwithoutrailroad

accessby1892,countieswithloginitialpopulationonestandarddeviationabovethe

average,havea7.2percentlowergrowthbetween1885and1902thanthatof

countiesatthemean.However,ifacountygainedrailroadaccessby1892,this7.2

percentdeclinebecomesa1.9percentdecline.Whencombined,theseresultsimply

thatrailroadconstructionwaskeytobothstructuralchangeandurbanization.

Myresultsprovidefurtherimplicationsforthemoregeneralquestiononwhythe

industrysectorinJapanadoptedWesterntechnologysoquicklyanddevelopedso

rapidlyaftertheMeijiRestoration.Thispapersuggestsoneexplanation;acentralized

governmentreceptivetoWesterntechnology,whichenabledthesechangesbyrapidly

constructingarailroadnetwork.

Technologicalchoiceandurbanagglomeration:

SteamvswaterpowerinFrenchindustrialization

FranzXaverZobl

LondonSchoolofEconomics

Abstract

The diffusion of steam power and accelerated urbanisation are seen as central

elementsofmoderneconomicdevelopmentduringthe19thcentury.Inspiteofthe

simultaneous occurrence of these two processes their interrelatedness has only

recentlyledtoempiricalinvestigationsfortheUnitedStates(Kim,2005)andGermany

(Gutberlet,2014).Thisarticlecontributestothisevolvingliteraturebyaddingacase

ofslowurbanisationandadherencetowaterpower: thecaseofFrance.Economic

historians like Crouzet (1996) and Cameron (1985) have pointed towards a close

relationship between power-choice and urbanisation. Besides testing this

relationship, this article goes one step further and links the urbanisation effect of

steam to economic development through urban agglomeration economies. This

articleisthefirstattempttoanswertheresearchquestionwhetherFrenchadherence

to water power contributed to its slow urbanisation, limited gains from urban

agglomerationandthroughthismechanismconstrainedeconomicdevelopment.

Applyingvariousmodelsofurbanlocation,fromadiscretechoicemodelfollowingKim

(2005)toafullycontinuousspecification,IfindstrongevidencethatFrenchadherence

towaterpowerwasassociatedwithlowerlevelsofurbanisation.Theanalysisisbased

ontwomid-19thcenturyindustrialcensuseswhichprovidedetailedinformationon

powersourceatahighlevelofregionalandindustrydisaggregation.Thisinformation

islinkedtocitylevelurbanpopulationderivedfrom19thcenturypopulationcensuses.

Dependingontheexactspecificationandthetimeperiod,Ifindthatsteam-powered

firmswere between 1.3 and 2.5 timesmore likely to be located in urban regions

compared to non-steam and non-water powered firms.On the other hand,water

poweredfirmsweremarginally,though,statisticallysignificantlymorelikelytolocate

inruralregions(1.2-1.3times).Lookingatcities insteadofregions,waterpowered

firmsaremuchmorelikelytobelocatedinnon-urbancommunes(2-2.8times).The

urbanpreferenceofsteampoweredfirmsislessclearatthecommunelevelthanitis

attheregionallevel.Largerfirmsorfactories,irrespectiveoftheirpowersource,are

bothstatisticallyandeconomicallyhighlysignificantlyassociatedwithurbanity.

Thefindingsofpower-specificlocationchoicearelinkedtotheeconomicsuccessof

theFrencheconomybytestingfortheexistenceofbenefitsofurbanagglomeration.

If benefits of urban agglomeration existed in the French 19th century economy, a

faster diffusion of steam power, substituting water power, would have fostered

economicgrowththroughitspositiveeffectonurbanisation.Theexistenceofbenefits

of urban agglomeration is empirically analysed by estimating urban premiums in

wages and labour productivity. After adjusting for endogeneity biases by

instrumentingurbanitywithurbanisationratiosin1806,Ifindthaturbanfirmspaid

13-14%higherwagesandwere16-22%moreproductivethantheirruralcounterparts,

dependingonthecensusperiod.Hence,itisconcludedthatFrencheconomicgrowth

wasindeedconstrainedbyitsadherencetowaterpowerandslowdiffusionofsteam

power.

References

Cameron,R.(1985).AnewviewofEuropeanindustrialization.EconomicHistoryReview,38(1):1–23.Crouzet,F.(1996).France.InTeich,M.andPorter,R.,editors,Theindustrialrevolutioninnationalcontext:EuropeandtheUSA,36–63,CambridgeUniversityPress,Cambridge.Gutberlet,T.(2014).MechanizationandthespatialdistributionofindustriesintheGermanEmpire,1875to1907.TheEconomicHistoryReview,67(2):463–491.Kim,S.(2005).Industrializationandurbanization:Didthesteamenginecontributetothegrowthofcitiesintheunitedstates?ExplorationsinEconomicHistory,42(4).

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