nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2015‒05‒30
twenty-six papers chosen by

  1. Economic Impact of the Irish revolution By Eoin McLaughlin
  2. Human capital and long run economic growth : Evidence from the stock of human capital in England, 1300-1900 By de Pleijt, Alexandra M.
  3. Wealth and Inheritance in Britain from 1896 to the Present By A.B. Atkinson
  4. What happened to heterodox economics in Germany after the 1970s By Heise, Arne; Thieme, Sebastian
  5. Richard Titmuss: Forty years on By Howard Glennerster
  6. Japan and the Great Divergence, 725-1874 By Bassino, Jean-Pascal; Broadberry, Stephen; Fukao, Kyoji; Gupta, Bishnupriya; Takashima, Masanori
  7. Inequality and poverty in a developing economy: Evidence from regional data (Spain, 1860-1930) By Francisco J. Beltran Tapia; Julio Martinez-Galarrage
  8. Towards a tacit low-degree independence central banking model ? By BLANCHETON Bertrand
  9. A tale of paradigm clash: Simon, situated cognition and the interpretation of bounded rationality By Petracca, Enrico
  10. The more the merrier? Evidence on quality of life and population size using historical mines By Stefan Leknes
  11. ‘Cast Back Into The Dark Ages Of Medicine'? The Challenge Of Antimocrobial Resistance By Ó Gráda, Cormac
  12. The Indigenous Roots of Representative Democracy By Jeanet Bentzen; Jacob Gerner Hariri; James A. Robinson
  13. Commodity Price Booms and Populist Cycles. An Explanation of Argentina’s Decline in the 20th Century By Emilio Ocampo
  14. How Did Japan Catch-up On The West? A Sectoral Analysis Of Anglo-Japanese Productivity Differences, 1885-2000 By Broadberry, Stephen; Fukao, Kyoji; Zammit, Nick
  15. Socially Optimal Service hours with Special Offers By Kazuki Onji; John P. Tang
  16. How Rich Will China Become? By Yi, Kei-Mu; Jiang, Jingyi
  17. Economic Development In Africa And Europe : Reciprocal Comparisons By Broadberry, Stephen; Gardner, Leigh
  18. The income distribution in the UK: A picture of advantage and disadvantage By Stephen P Jenkins
  19. Piketty is wrong By Obregon, Carlos
  21. Reconsidering Ethnic-Based-Autonomy Movements in Meghalaya: An Analysis By Singha, Komol; Nayak, Purusottam
  22. Piketty in the long run By Frank A Cowell
  23. SWAMI VIVEKANAND’S VISION OF EDUCATION By D. M. Bakrania; Rajendra V. Jadeja
  24. Family Economics Writ Large By Jeremy Greenwood; Nezih Guner; Guillaume Vandenbroucke
  25. Corporation Law and the Shift toward Open Access in the Antebellum United States By Eric Hilt
  26. Does It Matter Where You Came From? Ancestry Composition and Economic Performance of U.S. Counties, 1850-2010 By Fulford, Scott L.; Petkov, Ivan; Schiantarelli, Fabio

  1. By: Eoin McLaughlin (Department of Geography and Sustainable Development, University of St. Andrews)
    Abstract: Over the period 1912 to 1923 Ireland underwent a constitutional revolution. The aim of this paper is to detail the economic context of this revolution and to outline some longer-term effects that the revolutionary period had on Irish economic development. The focus is predominantly on the Irish Free State, although comparison and reference is made to the ‘home rule’ polity of Northern Ireland. This paper was prepared as a chapter for the forthcoming Atlas of the Irish Revolution.
    Keywords: Sustainability, Irish economic history, revolution, partition
    JEL: N14 N44
    Date: 2015–05
  2. By: de Pleijt, Alexandra M. (Utrecht University)
    Abstract: Did human capital contribute to economic growth in England? In this paper the stock of total years of schooling present in the population between 1300 and 1900 is quantified. The stock incorporates extensive source material on literacy rates, the number of primary and secondary schools and enrolment figures. The trends in the data suggest that, whilst human capital facilitated pre-industrial economic development, it had no role to play during the Industrial Revolution itself: there was a strong decline in educational attainment between ca. 1750 and 1830. A time series analysis has been carried out that confirms this conclusion.
    Keywords: Human capital ; Industrial Revolution ; economic growth ; England JEL classification: N10 ; N30 ; O47 ; O57
    Date: 2015
  3. By: A.B. Atkinson
    Abstract: There has been a large rise in the UK ratio of personal wealth to national income. Personal wealth has grown since the 1970s about twice as fast in real terms as national income. Has this rise in the wealth-income ratio led to a corresponding increase in the wealth being passed on from one generation to the next? Are we returning to the levels of inheritance found in the 19th century? In France, the research of Thomas Piketty has highlighted the return of inheritance. The aim of this paper is to construct comparable UK evidence on the extent of the transmission of wealth in the form of estates and, insofar as it is possible, gifts inter vivos. It takes a long-run view of inheritance, starting from 1896, when the modern Estate Duty was introduced and exploits the extensive estate data published over the years in the UK. Construction of a long-run time series for more than a century is challenging, and there are important limitations to the resulting estimates which are discussed extensively in the paper. The resulting time-series demonstrates the major importance of inheritance in the UK before the First World War, when the total transmitted wealth represented some 20 per cent when expressed relative to net national income. In the inter-war period, the total was around 15 per cent, falling to some 10 per cent after the Second World War, and then falling further to below 5 per cent in the late 1970s. Since then, there has indeed been an upturn, although less marked than in France: a rise from 4.8 per cent in 1977 to 8.2 per cent in 2006. This increase was more or less in line with the increase in personal wealth, and has to be interpreted in the light of the changing net worth of the corporate and public sectors of the economy.
    Keywords: wealth, inheritance, estate data
    JEL: D31
    Date: 2013–11
  4. By: Heise, Arne; Thieme, Sebastian
    Abstract: In the context of ongoing criticisms of the lack of pluralism in economics, the present article aims to discuss the development of 'heterodox' economics since the 1970s. Following Lakatos's concept of scientific research programs (srp), and concentrating on the situation in Germany, the article will discuss classifications of economics, and will specify the understanding of diversity in the light of 'axiomatic variations' of the economic mainstream. This will form the basis for the subsequent description of the development of heterodoxy in Germany, with special reference to the founding of new universities and the reform movements in the 1970s. It can be shown that the heterodox scene flourished in this period, but that this pluralization remained fragmented and short-lived; by the 1980s at the latest heterodoxy was again on its way to marginalization. The history of heterodoxy in Germany thus presents itself as an unequal 'battle of the paradigms', and can only be told as the story of a failure.
    Keywords: heterodox economics,pluralization,philosophy of science,sociology of science
    JEL: A11 B20 B50 Z13
    Date: 2015
  5. By: Howard Glennerster
    Abstract: Richard Titmuss was one of the world's leading public analysts and philosophers. He was highly influential in shaping the post-war welfare state and created the subject we now call social policy. What would he make of the present state of welfare? This lecture reflects on the man and the times which shaped his ideas. What is his legacy forty years on from his death? Which of his ideas have lasted and which have proved less durable? What gaps were there in his world view?
    Keywords: social policy, Titmuss, well-being
    JEL: I38
    Date: 2014–02
  6. By: Bassino, Jean-Pascal (IAO, ENS de Lyon); Broadberry, Stephen (London School of Economics); Fukao, Kyoji (Hitotsubashi University); Gupta, Bishnupriya (University of Warwick); Takashima, Masanori (Hitotsubashi University)
    Abstract: Japanese GDP per capita grew at an annual rate of 0.04 per cent between 725 and 1874, but the growth was episodic, with the increase in per capita income concentrated in three periods, 1150-1280, 1450-1600 and after 1730, interspersed with periods of stable per capita income. There is a similarity here with the growth pattern of Britain. The first countries to achieve modern economic growth at opposite ends of Eurasia thus shared the experience of an early end to growth reversals. However, Japan started at a lower level than Britain and grew more slowly until the Meiji Restoration.
    Keywords: Japan ; Great Divergence ; GDP per capita ; growth reversals ; Britain JEL classification: N10 ; N30 ; N35 ; O10 ; O57
  7. By: Francisco J. Beltran Tapia (University of Cambridge); Julio Martinez-Galarrage (Universitat de Valencia)
    Abstract: Apart from measuring inequality and poverty at the provincial level in Spain between 1860 and 1930, this paper empirically assesses the relationship between economic growth and both inequality and destitution. The results, on the one hand, confirm the presence of a KuznetsÕ curve. However, although growing incomes did not directly contribute to reducing inequality, at least during the early stages of modern economic growth, other processes associated with economic growth significantly improved the situation of the bottom part of the population. On the other hand, growing incomes and lower inequality levels are shown to have been pro-poor.
    Keywords: Inequality, economics growth, economic history, Spain, Kuznets curve
    JEL: O10 N13 N14 I30
    Date: 2015–05
  8. By: BLANCHETON Bertrand
    Abstract: This article puts the independence of central banks into historical perspective. In doing so, it underlines the highly versatile nature of the balance of forces between central banks and governments. From this viewpoint, the situation of public finances emerges as a key explanatory factor, and an analysis of the sequence of central banking models is proposed from the late 19th century to the present day. The article upholds the thesis of the emergence, since the subprime crisis, of a new model qualified as “tacit low-degree independence”: central banks have, of their own volition, given up some of their de facto independence, helping governments to contain the rise in national debt. But while keeping a step ahead of pressure from governments, they have lost the control of money supply.
    Keywords: central banking, public debt, central bank independence
    JEL: N10 N20 G20 N40
    Date: 2015
  9. By: Petracca, Enrico
    Abstract: The intellectual figure of Herbert A. Simon is well known for having introduced the influential notion of bounded rationality in economics. Less known, at least from the economists’ point of view, is the figure of Simon as eminent cognitive psychologist, co-founder of so-called cognitivism, a mainstream approach in cognitive psychology until the 80s of the last century. In fact, the two faces of Simon’s intellectual figure, as rationality scholar and as cognitive scientist, are not factorizable at all: according to Simon himself, cognitivism is bounded rationality and bounded rationality is cognitivism. This paper tries to answer a simple research question: has the notion of bounded rationality fully followed the development of cognitive psychology beyond cognitivism in the post-Simonian era? If not, why? To answer such questions, this paper focuses on a very specific historical episode. In 1993, on the pages of the journal Cognitive Science, Simon (with his colleague Alonso Vera) openly confronted the proponents of a new (paradigmatic) view of cognition called situated cognition, a firm challenger of cognitivism, which was going to inspire cognitive psychology from then on. This paper claims that this tough confrontation, typical of a paradigm shift, might have prevented rationality studies in economics from coming fully in touch with the new paradigm in cognitive psychology. A reconstruction of the differences between cognitivism and situated cognition as they emerged in the confrontation is seen here as fundamental in order to assess and explore this hypothesis.
    Keywords: Herbert A. Simon; bounded rationality; situated cognition theory; economics and cognitive psychology
    JEL: B31 B41 D03 D80
    Date: 2015
  10. By: Stefan Leknes (Department of Economics, Norwegian University of Science and Technology)
    Abstract: I attempt to find the causal effect of endogenous population size on quality of life. Quantity and quality of consumer amenities would increase with urban scale if not offset by congestion effects. To deal with endogeneity, I utilize a quasi-experimental design where I exploit the exogenous spatial distribution of mineral resources with Norwegian historical mines from the 12th till the 19th century. The findings suggest persistence in population patterns from early industrialization, and a positive urban scale effect on quality of life that pass multiple tests of confounding factors.
    Date: 2014–11–25
  11. By: Ó Gráda, Cormac (University College Dublin and CAGE, University of Warwick)
    Abstract: Today people in high-income countries can expect to live about twice as long as their forebears a century ago. This huge increase in life expectancy is due in large part to the eradication or near-eradication of a whole range of potentially fatal infectious diseases. In the UK c. 1900 one such disease, tuberculosis, was responsible for one death in ten; it cut short the lives of Emily Brontë (1848, aged 30), Aubrey Beardsley (1898, aged 26), D. H. Lawrence (1930, aged 45), George Orwell (1950, aged 46), and myriad others. Measles, scarlet fever, diphtheria, and whooping cough accounted for another 6.5 per cent of British deaths, and diarrhoea and typhus carried off another 5 per cent. Today those diseases kill virtually no one in high-income countries. The share of all deaths in England and Wales due to infectious diseases dropped from nearly half in 1850 to one-third in 1900, whereas today they account for about 7 per cent, mainly elderly people succumbing to pneumonia or acute bronchitis. In high-income countries like the UK most of us can expect to succumb, not to infectious diseases, but to cancer, heart disease, and other non-contagious causes and illnesses.
  12. By: Jeanet Bentzen; Jacob Gerner Hariri; James A. Robinson
    Abstract: We document that rules for leadership succession in ethnic societies that antedate the modern state predict contemporary political regimes; leadership selection by election in indigenous societies is associated with contemporary representative democracy. The basic association, however, is conditioned on the relative strength of the indigenous groups within a country; stronger groups seem to have been able to shape national regime trajectories, weaker groups do not. This finding extends and qualifies a substantive qualitative literature, which has found in local democratic institutions of medieval Europe a positive impulse towards the development of representative democracy. It shows that contemporary regimes are shaped not only by colonial history and European influence; indigenous history also matters. For practitioners, our findings suggest that external reformers' capacity for regime-building should not be exaggerated.
    JEL: D72 N4 P16
    Date: 2015–05
  13. By: Emilio Ocampo
    Abstract: Argentina’s economic and institutional decline has long posed a conundrum to economists and social scientists. In particular, it challenges theories that seek to explain cross-country growth differences over time. Those theories that claim that institutions have a first-order effect on growth cannot explain the persistent economic decadence of a country that in 1930 was among the most institutionally advanced in Latin America. Theories that claim that that education and growth precede inclusive institutions face a similar problem, since Argentina was one of the most educationally advanced countries in Latin America. The same can be said of theories that claim that social capital is the determinant factor that explains long-term growth. This paper emphasizes the key role played by recurrent cycles of populism in pushing the country into secular decadence and posits that, in Argentina, rising commodity prices have driven the cycles of populism.
    Keywords: Populism, commodity cycles, Argentina, inequality, institutions, social capital, economic growth, economic decline.
    Date: 2015–05
  14. By: Broadberry, Stephen (London School of Economics); Fukao, Kyoji (Hitotsubashi University); Zammit, Nick (University of Warwick)
    Abstract: Although Japanese economic growth after the Meiji Restoration is often characterised as a gradual process of trend acceleration, comparison with the United States suggests that catching-up only really started after 1950, due to the unusually dynamic performance of the US economy before 1950. A comparison with the United Kingdom, still the world productivity leader in 1868, reveals an earlier period of Japanese catching up between the 1890s and the 1920s, with a pause between the 1920s and the 1940s. Furthermore, this earlier process of catching up was driven by the dynamic productivity performance of Japanese manufacturing, which is also obscured by a comparison with the United States. Japan overtook the UK as a major exporter of manufactured goods not simply by catching-up in labour productivity terms, but by holding the growth of real wages below the growth of labour productivity so as to enjoy a unit labour cost advantage. Accounting for levels differences in labour productivity between Japan and the United Kingdom reveals an important role for capital in the catching-up process, casting doubt on the characterisation of Japan as following a distinctive Asian path of labour intensive industrialisation.
    Keywords: Labour productivity ; sectoral disaggregation ; international comparison JEL classification: N10 ; N30 ; O47 ; O57
  15. By: Kazuki Onji (Graduate School of Economics, Osaka University); John P. Tang (Graduate School of Economics, Osaka University)
    Abstract: This study provides evidence on tax distortion to organizational choices of firm using historical data. We utilize the 1887 introduction of a personal income tax (PIT) in Japan as a quasi-experiment to examine tax-motivated incorporation. We circumvent the data limitation in the 19 th century by drawing on a firm-level dataset constructed from genealogies of Japanese corporations. The sample is 3,203 firm- year observations spanning 1880-1892. We find that the introduction of PIT affected the adoption of simpler types of corporations and increased the corporate share of establishments by about 3 percentage points. The evidence indicates the role of a corporate income tax as a backstop to maintain revenue performance of PIT.
    Keywords: Tax Avoidance, Organizational Form, Business Incorporation
    JEL: G34 H25 K34
    Date: 2015–05
  16. By: Yi, Kei-Mu (Federal Reserve Bank of Minneapolis); Jiang, Jingyi (Federal Reserve Bank of Minneapolis)
    Abstract: China’s impressive economic growth since the 1980s raises the question of how much richer it will become over future decades. Its growing share of the world economy affects other national economies. Understanding the future course of the Chinese economy is therefore important for both fiscal and monetary policymaking in the United States and elsewhere. Using fundamental growth theory, data from China and from Korea and Japan’s similar “miracle” growth experiences, we provide a suggestive calculation for China’s future per capita income. Our ballpark estimate is that China’s per capita income relative to that of the United States will grow by a factor of two to three over the next half-century.
    Date: 2015–05–20
  17. By: Broadberry, Stephen (London School of Economics); Gardner, Leigh (London School of Economics and Stellenbosch University,)
    Abstract: Recent advances in historical national accounting have allowed for global comparisons of GDP per capita across space and time. Critics have argued that GDP per capita fails to capture adequately the effects of new technology on living standards, and have developed alternative measures such as the human development index (HDI). Whilst recognising that this provides an appropriate measure for assessing levels of welfare, we argue that GDP per capita remains a more appropriate measure for assessing development potential, encompassing production as well as consumption. Twentieth-century Africa and pre-industrial Europe are used to show how such data can guide reciprocal comparisons to provide insights into the process of development on both continents.
  18. By: Stephen P Jenkins
    Abstract: This paper describes the UK income distribution and how it has evolved over the last 50 years. It also includes some comparisons with the income distributions of other rich countries. Multiple perspectives on the distribution are provided: there is evidence about real income levels and inequality, and the prevalence of affluence and of poverty.
    Keywords: Inequality, poverty, affluence, income distribution, United Kingdom
    JEL: D31 I32
    Date: 2015–02
  19. By: Obregon, Carlos
    Abstract: Piketty argues that there are long-run fundamental laws in capitalism that will necessarily concentrate the income in favor of the privileged 1 or 10% of the population. Piketty's two fundamental laws are really theoretical propositions that presume relative rigidity in the rate of return of capital and in the net savings rate. We show that such propositions are incompatible with seventy-five years of studies estimating the value of the elasticity of substitution between capital and labor, and with the theoretical models of savings optimizing behavior. We argue that Piketty's laws are wrong and that they contradict the essence of market dynamics. Economic agents optimize and neither the rate of return of capital nor the net savings rate can remain relatively stable as Piketty supposes. Using empirical estimates of the long-run elasticity of substitution between capital and labor, and analyzing the relationship between the net savings rate and the real growth rate of the economy, we show that Piketty's forecast for the second half of the twenty-first century is inadequate. We propose alternative forecasts.
    Keywords: Piketty, Capitalism, Rate of return of capital, Savings rate, Economy growth, Elasticity between capital an labor
    JEL: D30 D31 D33 E20 E21 E25 F01 O47 O57
    Date: 2015–05–25
  20. By: Dipti Patel
    Abstract: Nostalgia has remained unexplainably a contemporary concept. It can be defined as a longing or craving for a home that no more subsists or has never subsisted. In the 17th century, nostalgia was believed to be a remediable disease and often considered to be a negative word by the historians. The nostalgic study does not coincide with any particular field or discipline but it is frequently narrated in the numerous tales of Immigrants. With the help of Unaccustomed Earth by Jhumpa Lahiri, this research paper endeavours to bring forth the fact that though at the core of nostalgia is a sense of loss that is both mourned and accepted, it can also be an essential means on the bases of which one might draw to maintain, enhance and imbibe true meaning of life. Key words: Nostalgia, diaspora
    Date: 2014–09
  21. By: Singha, Komol; Nayak, Purusottam
    Abstract: To the unfamiliar, communities living in Meghalaya appear to be homogenous ones. In reality, however, they are socially, politically and culturally not only heterogeneous but are also defined by distinct tribal and clan markers. Three major tribes– the Khasi, the Garo, and the Jaintia, dominate the state. Each of them had their own kingdoms until they were brought under the British colonial administration in the 19th century. Consequently, after independence, these tribes and their territories were merged with undivided Assam, and then carved out as a full-fledged state of Meghalaya in 1972. Soon after attaining statehood, tensions cropped up between the indigenous communities and migrants mainly over the issue of economic opportunity. However, these days, it has slowly shifted towards the internal feuds among the indigenous tribes and separate demand for states within the state. With this background, the paper attempts to analyse the causes and consequences of autonomy demands asserted by different communities/tribes within the state.
    Keywords: Autonomy, Conflict, Garo, Identity, Khasi, Meghalaya
    JEL: A1 O1
    Date: 2015–05–26
  22. By: Frank A Cowell
    Abstract: I examine the idea of 'the long run' in Piketty (2014) and related works. In contrast to simplistic interpretations of long-run models of income- and wealth-distribution Piketty (2014) draws on a rich economic analysis that models the intra- and inter-generational processes that underlie the development of the wealth distribution. These processes inevitably involve both market and non-market mechanisms. To understand this approach, and to isolate the impact of different social and economic factors on inequality in the long run, we use the concept of an equilibrium distribution. However the long-run analysis of policy should not presume that there is an inherent tendency for the wealth distribution to approach equilibrium.
    Keywords: long run, income distribution, wealth distribution, inequality, inheritance, equilibrium
    JEL: D31
    Date: 2015–02
  23. By: D. M. Bakrania; Rajendra V. Jadeja
    Abstract: Swami Vivekananda (1863 – 1902), a great thinker and reformer of India, embraces education, which for him signifies ‘man-making’, as the very mission of his life. In this paper, which purports to expound and analyse Vivekananda’s views on education, an endeavour has been made to focus on the basic theme of his philosophy, viz. the spiritual unity of the universe. Whether it concerns the goal or aim of education, or its method of approach or its component parts, all his thoughts, we shall observe, stem from this underlying theme of his philosophy which has its moorings in Vedanta. Key words: Swami Vivekanand, Education, Vision of Education
    Date: 2014–03
  24. By: Jeremy Greenwood (University of Pennsylvania); Nezih Guner (Universitat Autonoma de Barcelona); Guillaume Vandenbroucke (Federal Reserve Bank of St. Louis)
    Abstract: Powerful currents have reshaped the structure of families over the last century. There has been (i) a dramatic drop in fertility and greater parental investment in children; (ii) a rise in married female labor-force participation; (iii) a decline in marriage and a rise in divorce; (iv) a higher degree of assortative mating; (v) more children living with a single mother; (vi) shifts in social norms governing premarital sex and married women's roles in the labor market. Macroeconomic models explaining these aggregate trends are surveyed. The relentless flow of technological progress and its role in shaping family life are stressed.
    Keywords: Assortative mating, female labor supply, family economics, fertility, household income inequality, household production, human capital, macroeconomics, marriage and divorce, quality-quantity tradeoff, premarital sex, single mothers, social change, survey, technological progress, women's rights
    JEL: D31 D58 E1 E13 J1 J2 J12 J13 J22 N2 N30 O3 O11 O15
    Date: 2015–05
  25. By: Eric Hilt
    Abstract: This paper analyses the general incorporation statutes for manufacturing firms adopted by the American states up to 1860. Prior to the enactment of a general law, a business could only incorporate by obtaining a special act of their state legislature; general statutes facilitated incorporation through a routine administrative procedure. A new chronology of the adoption of these statutes reveals that several states enacted them much earlier than previous scholarship has indicated. An analysis of the contents of these laws indicates that many imposed strict regulations on the corporations they created, whereas others granted entrepreneurs near-total freedom. Many Southern states enacted particularly liberal statutes, but sometimes also prohibited nonwhites from incorporating businesses or gave a government official discretion over access to the law. Finally, an analysis of the volume of incorporation through special charters reveals that the states that failed to adopt general incorporation laws tended to offer unusually generous access to incorporation through special legislative acts. Taken together, these results imply that the adoption of a general incorporation statute did not always represent a discrete transition to open access to the corporate form. Instead, general statutes sometimes included highly restrictive provisions governing access, and some states generously accommodated demands for incorporation in the absence of a general statute.
    JEL: K2 N0 N41 N81
    Date: 2015–05
  26. By: Fulford, Scott L. (Boston College); Petkov, Ivan (Boston College); Schiantarelli, Fabio (Boston College)
    Abstract: The United States provides a unique laboratory for understanding how the cultural, institutional, and human capital endowments of immigrant groups shape economic outcomes. In this paper, we use census micro-sample information to reconstruct the country-of-ancestry distribution for US counties from 1850 to 2010. We also develop a county-level measure of GDP per capita over the same period. Using this novel panel data set, we investigate whether changes in the ancestry composition of a county matter for local economic development and the channels through which the cultural, institutional, and educational legacy of the country of origin affects economic outcomes in the US. Our results show that the evolution of the country-of-origin composition of a county matters. Moreover, the culture, institutions, and human capital that the immigrant groups brought with them and pass on to their children are positively associated with local development in the US. Among these factors, measures of culture that capture attitudes towards cooperation play the most important and robust role. Finally, our results suggest that while fractionalization of ancestry groups is positively related with county GDP, fractionalization in attributes such as trust, is negatively related to local economic performance.
    Keywords: immigration, ethnicity, ancestry, economic development, culture, institutions, human capital
    JEL: J15 N31 N32 O10 Z10
    Date: 2015–05

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