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on Business, Economic and Financial History |
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Issue of 2016‒02‒17
nineteen papers chosen by |
| By: | Steger, Thomas; Knoll, Katharina; Schularick, Moritz |
| Abstract: | How have house prices evolved in the long-run? This paper presents, for the first time, annual house prices for 14 advanced economies since 1870. Based on extensive data collection, we show that the past decades have seen a historically unprecedented boom in global house prices. Real house prices in most industrial economies stayed constant from the 19th to the mid-20th century, but rose strongly during the second half of the 20th century. Land prices, not replacement costs, hold the key to understanding the trajectory of house prices in the long-run. Rising land prices explain about 80 percent of the global house price surge since World War II. In the past 30 years alone, land prices in advanced economies approximately doubled in real terms. We also show that gains in the value of land have been the key driver of the increasing wealth-to-income ratios in advanced economies over the past decades. |
| JEL: | N10 O10 R30 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112848&r=his |
| By: | Fausto Brito (Cedeplar-UFMG) |
| Abstract: | The purpose of this article is to clarify the concept of migratory pattern from the history of internal migration in Brazil in the second half of the twentieth century and the first decade of this century . The reference to the Brazilian case is intended to place the analytical suggestions within the limits of the historical process in which there have been internal migration . It is important to mention that this new pattern that is announced does not mean a complete transition, however, it coexist characteristics of old and new and this is perhaps its most important structural mark portrayed mainly by the stability of the migratory trajectories. |
| Keywords: | Brazil, internal migration, migration theory and migratory pattern |
| JEL: | Y80 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td526&r=his |
| By: | Baumeister, Christiane; Kilian, Lutz |
| Abstract: | It has been forty years since the oil crisis of 1973/74. This crisis has been one of the defining economic events of the 1970s and has shaped how many economists think about oil price shocks. In recent years, a large literature on the economic determinants of oil price fluctuations has emerged. Drawing on this literature, we first provide an overview of the causes of all major oil price fluctuations between 1973 and 2014. We then discuss why oil price fluctuations remain difficult to predict, despite economists' improved understanding of oil markets. Unexpected oil price fluctuations are commonly referred to as oil price shocks. We document that, in practice, consumers, policymakers, financial market participants and economists may have different oil price expectations, and that, what may be surprising to some, need not be equally surprising to others. |
| Keywords: | oil market,oil price shock,heterogeneous price expectations,OPEC,peak oil,unconventional oil |
| JEL: | Q43 C53 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:525&r=his |
| By: | Olivetti, Claudia (Boston College); Petrongolo, Barbara (Queen Mary, University of London) |
| Abstract: | Women in developed economies have made major inroads in labor markets throughout the past century, but remaining gender differences in pay and employment seem remarkably persistent. This paper documents long-run trends in female employment, working hours and relative wages for a wide cross-section of developed economies. It reviews existing work on the factors driving gender convergence, and novel perspectives on remaining gender gaps. The paper finally emphasizes the interplay between gender trends and the evolution of the industry structure. Based on a shift-share decomposition, it shows that the growth in the service share can explain at least half of the overall variation in female hours, both over time and across countries. |
| Keywords: | female employment, gender gaps, demand and supply, industry structure |
| JEL: | E24 J16 J31 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9659&r=his |
| By: | Gehrig, Thomas Paul; Fohlin, Caroline; Haas, Marlene |
| Abstract: | Using a new daily dataset for all stocks traded on the New York Stock Exchange, we study the evolution of information asymmetry during runs on financial institutions and the subsequent liquidity freeze of October 1907 - one of the severest financial crises of the 20\textsuperscript{th} century. We find that increased informational risk and resulting runs on financial institutions led to a freeze in short-term money markets, which forced liquidation of stock positions, and drained liquidity from the stock market: spreads increased from 0.5\% to 3\% during the crisis episode. This liquidity freeze was primarily driven by fears of informed trading and was most intense for the mining sector. In addition to wider spreads and tight money markets, freezing liquidity manifests itself in fading trading volume and increased price sensitivity to changes in trading volume. Importantly, short-term liquidity measures did not have a long-lasting soothing effect on trading volume, but only on prices. We go on to show that rising illiquidity is associated with lower asset prices. Thus, our findings demonstrate how opaque markets can easily transmit an idiosyncratic rumor into a long-lasting, market-wide crisis. They demonstrate the usefulness of illiquidity measures to alert market participants to pendings market runs. |
| JEL: | G14 D84 E44 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113008&r=his |
| By: | Claudia Olivetti (Boston College and NBER); Barbara Petrongolo (Queen Mary University of London and CEP (LSE)) |
| Abstract: | Women in developed economies have made major inroads in labor markets throughout the past century, but remaining gender differences in pay and em ployment seem remarkably persistent. This paper documents long-run trends in female employment, working hours and relative wages for a wide cross-section of developed economies. It reviews existing work on the factors driving gender convergence, and novel perspectives on remaining gender gaps. The paper finally emphasizes the interplay between gender trends and the evolution of the industry structure. Based on a shift-share decomposition, it shows that the growth in the service share can explain at least half of the overall variation in female hours, both over time and across countries. |
| Keywords: | Gender gaps, Demand and supply, Industry structure |
| JEL: | E24 J16 J31 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp782&r=his |
| By: | Bengtsson, Erik (Department of Economic History, Lund University) |
| Abstract: | One of the major ways in which economic inequality can increase is when the development of wages of ordinary workers trail productivity and GDP growth, meaning that the increasing riches fall in the hand of other social groups (top employees, owners of land and capital). This paper investigates the relationship between wages and GDP in Denmark, Norway and Sweden from 1800 to 1910, using wage series for workers in agriculture as well as crafts and industry. It shows wages trailing especially in Norway from 1840 to the mid-1870s but also in Denmark in the 1850s and 1860s. On the other hand, wages generally increase faster than GDP in the 1880s and 1890s. These developments are explained with labour supply (population growth, migration) as well as class conflict and social policy. |
| Keywords: | Wages; living standards; inequality; working class; Denmark; Norway; Sweden |
| JEL: | E24 I30 J30 N13 N33 |
| Date: | 2016–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:luekhi:0142&r=his |
| By: | Wyrwich, Michael |
| Abstract: | This paper investigates the sources of the significantly higher labor force participation of East Ger-man women as compared to their peers in West Germany. The previous literature attributes this to a legacy of socialist labor market policies. This study challenges this hypothesis and demonstrates that the share of women in the labor market across regions that were exposed to the socialist regime was already higher before German division and the introduction of socialist labor market policies. Furthermore, pre-socialist differences and regional conditions play a more important role than socialist legacy in explaining current regional differences in labor force participation of women and in shaping social acceptance of working women. The results suggest that labor market conditions and employment opportunities for women have been more or less not similar before German division. Furthermore, regional differences in current female labor force participation rates seem to be not predominantly shaped by socialist legacy. |
| JEL: | J16 N34 R23 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113083&r=his |
| By: | Bhalotra, Sonia R. (University of Essex); Chakravarty, Abhishek (University of Essex); Gulesci, Selim (Bocconi University) |
| Abstract: | Dowry is often adduced as an explanation of son preference in India, but there is little evidence that dowry motivates son-preferring behaviours. On the premise that gold is an integral part of dowry, we use variation in gold prices to investigate this. First, we exploit a sharp unexpected rise in the price of gold in 1980 and, using a difference-in-discontinuities design, find that the gold price hike is mirrored in an increase in girl relative to boy mortality in the neonatal and infant period. We also find that surviving girls are shorter. Second, using monthly time series data for 35 years, we again find that cyclical variation in gold prices is reflected in excess girl mortality and, since the introduction of prenatal sex determination technology, in the sex ratio at birth. This constitutes the first evidence that dowry costs lead parents to eliminate foetal and newborn girls, and on a scale much larger than "dowry deaths" amongst married women which have been the subject of public attention. |
| Keywords: | dowry, son preference, missing girls, infant mortality, commodity price shocks |
| JEL: | I14 J16 O12 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9679&r=his |
| By: | Javier G. Gómez-Pineda (Banco de la República de Colombia) |
| Abstract: | El artículo estudia la inflación en Colombia durante 1951-1963 de acuerdo al enfoque de presión de costos (cost push inflation). El artículo propone un modelo en el que la inflación responde a los aumentos salariales, la devaluación y la inflación de alimentos. El modelo incorpora una ecuación para la inflación de alimentos en función del fenómeno El Niño-Oscilación del Sur. Entre los resultados se argumenta que los ajustes masivos en los salarios y la tasa de cambio actuaron como importantes fuerzas expansivas de la inflación durante los programas de estabilización y como fuerzas contractivas de la misma durante los prolongados períodos comprendidos entre los ajustes. Los choques de oferta de alimentos desempeñaron un papel importante en la evolución de la inflación en el corto plazo. El análisis lleva a dos principales implicaciones de política. Primero, la evolución de la inflación en el corto plazo ha sido atribuida por la literatura a los cambios en el crecimiento del dinero, pero el enfoque de inflación de costos ofrece importantes puntos de vista sobre la evolución de la inflación en el corto plazo. Segundo, Colombia no llegó a la hiperinflación porque no persistió en el objetivo de aumentar los salarios reales. En vez de esto, permitió aumentos de precios y renunció a regla de indexación de los salarios. En consecuencia la inflación se mantuvo flexible y bajó rápidamente. Classification JEL:N1, N16, E3, E52, E58 |
| Keywords: | Inflación de costos, espiral de precios y salarios, indexación, macroeconomía del populismo, mínimo vital y móvil |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:924&r=his |
| By: | Bengtsson, Erik (Department of Economic History, Lund University); Molinder, Jakob (Uppsala University) |
| Abstract: | In 1920, the working day in Swedish industry and services was cut from 10 to 8 hours without wages being cut correspondingly. This change resulted in a dramatic wage push, with real wages increasing by about 50 percent in the years from 1919 to the deflation of 1921–22. This paper studies the consequences of this wage push for real wages, unemployment, profits and investments. Since agriculture was not affected by the reform, we compare industry and services with agriculture to separate the effects of the reform from other factors. Furthermore, we distinguish between traded and non-traded sectors. We show that real wage effects were significant but that firms in non-traded industries and services faced more inelastic labour demand and thus could conserve profitability to a higher degree. In traded industries, on the other hand, wages relative to profits increased dramatically, and employers responded by increasing capital intensity, leading to jobless growth in the 1920s but continued low profits. We discuss the implications for the literature on interwar wages and employment, the more general inequality literature and the literature on the ‘Swedish model’. |
| Keywords: | wages; wage push; unemployment; working hours reform; inequality; wage shares; interwar period; Sweden |
| JEL: | N14 N34 N44 |
| Date: | 2016–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:luekhi:0143&r=his |
| By: | Gürtzgen, Nicole; Hank, Karsten |
| Abstract: | Barely any quantitative research has been devoted yet to the labor market consequences of incarceration for political offenses, which seems particularly unfortunate against the background of Europe's history of state persecution in the 20th century. Drawing on the example of the former German Democratic Republic (GDR), our paper seeks to gain a deeper understanding of how the experience of political imprisonment affected individuals subsequent career outcomes. In our empirical analysis, we exploit a one-percent sample drawn from a unique large-scale administrative data set (BASiD). To the best of our knowledge, our study provides unprecedented evidence on the labor market effects of political imprisonment, by (1) exploiting information on political imprisonment using administrative records; (2) differentiating between possible short and long-run consequences of political imprisonment; and (3) measuring outcomes before and after the transition from a centrally planned towards a market economy, thereby permitting us to distinguish the consequences of incarceration under different political and economic regimes. |
| JEL: | J15 K40 P37 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113134&r=his |
| By: | Floris, Joël; Müller, Consuela; Woitek, Ulrich |
| Abstract: | The paper analyzes the class specific biological standard of living in the city of Zurich during World War I. We find an increase of aver- age human stature for lower class conscripts born during this period, while the average height of conscripts from the upper and middle class stagnated or even decreased, despite the lack of change in the income differential. A potential explanation of this phenomenon could be the changes in access to food and consumption habits, affecting terminal height via changes in milk consumption. |
| JEL: | N34 N94 I30 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112909&r=his |
| By: | Blau, Francine D. (Cornell University); Kahn, Lawrence M. (Cornell University) |
| Abstract: | Using PSID microdata over the 1980-2010, we provide new empirical evidence on the extent of and trends in the gender wage gap, which declined considerably over this period. By 2010, conventional human capital variables taken together explained little of the gender wage gap, while gender differences in occupation and industry continued to be important. Moreover, the gender pay gap declined much more slowly at the top of the wage distribution that at the middle or the bottom and by 2010 was noticeably higher at the top. We then survey the literature to identify what has been learned about the explanations for the gap. We conclude that many of the traditional explanations continue to have salience. Although human capital factors are now relatively unimportant in the aggregate, women's work force interruptions and shorter hours remain significant in high skilled occupations, possibly due to compensating differentials. Gender differences in occupations and industries, as well as differences in gender roles and the gender division of labor remain important, and research based on experimental evidence strongly suggests that discrimination cannot be discounted. Psychological attributes or noncognitive skills comprise one of the newer explanations for gender differences in outcomes. Our effort to assess the quantitative evidence on the importance of these factors suggests that they account for a small to moderate portion of the gender pay gap, considerably smaller than say occupation and industry effects, though they appear to modestly contribute to these differences. |
| Keywords: | gender, gender pay gap, wage differentials, discrimination, human capital investment, occupations, occupational segregation |
| JEL: | J16 J24 J31 J71 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9656&r=his |
| By: | Loïc Charles (Paris 8 & INED); Guillaume Daudin (Dauphine & OFCE-SciencesPo) |
| Keywords: | 18th century, international trade statistics, France, Baltic, sound, Globalisation, economic history |
| JEL: | N73 N01 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1603&r=his |
| By: | Iyigun, Murat (University of Colorado, Boulder); Lafortune, Jeanne (Pontificia Universidad Catolica de Chile) |
| Abstract: | We document that, over the 20th century, age at first marriage followed a U-shaped pattern, while the gender education gap tracked an inverted-U path in the United States. To explain this, we propose a multi-period frictionless matching model where educational and marriage decisions are endogenous. Two key assumptions are made: marriage requires a fixed cost and married couples cannot study simultaneously. This simple model can replicate the aforementioned stylized facts and is consistent with our empirical result that exogenous delays in marriage age caused by minimum age laws decreased the educational difference within a couple while increasing their educational attainment. |
| Keywords: | timing, marriage, education |
| JEL: | J12 J11 N32 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9671&r=his |
| By: | Casari, Marco (University of Bologna); Lisciandra, Maurizio (University of Messina) |
| Abstract: | In an open economy with common property resources at the community level, marriage and migratory decisions crucially depend on inheritance rules on the commons. Motivated by the traditional management of the commons in the Italian Alps, we present a model that fits the evolution of property rights observed over six centuries. Women's rights over the commons were progressively eroded from the Middle Ages until 1800, when there was an almost universal adoption of a patrilineal inheritance system. Communities switched from an egalitarian system to a patrilineal inheritance system in an attempt to protect the per capita endowment of common resources from outside immigration. The model shows that inheritance rules have clear-cut implications for marriage strategies, migratory flows, and fertility rates. |
| Keywords: | inheritance, commons, migration, institutions, property rights |
| JEL: | J13 J16 Q24 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9601&r=his |
| By: | ITO Hiroyuki; KAWAI Masahiro |
| Abstract: | In this paper, we investigate how much a major national currency is used for trade invoicing by focusing primarily on the experiences of the U.S. dollar, Japanese yen, and Deutsche mark (DM) in the 1970s through the 1990s. We then attempt to draw lessons for China's renminbi (RMB) internationalization. Our data on the shares of the three major currencies in export invoicing show that the dollar has unequivocally been a global invoicing currency, the DM was a major regional currency in Europe, while the yen has neither been a global nor regional currency. DM invoicing was driven by European countries' trade ties with Germany. In contrast, the yen was not and is still not widely used for trade invoicing by Asia-Oceania countries, even including Japan itself, despite the region's strong trade ties with Japan. Our regression analysis on the determinants of the major currency share for trade invoicing (also including UK pound, French franc, Italian lira, and Swiss franc) in the 1970-1998 period suggests that the invoicing share of a major currency tends to be positively affected by the degree of other economies' trade ties with the major currency country and negatively affected by the degree of their financial development or openness. Also, the major currency share for trade invoicing is affected by both the weight of the major currencies in the implicit currency baskets of other economies or these economies' trade shares with major-currency zone countries. Economies belonging to the U.S. dollar zone tend to invoice their trade more in the dollar and less in the DM, while the opposite is observed for economies in the DM zone. The use of yen for trade invoicing is not much affected by its currency weight or the trade share with currency zones. European countries largely belonged to the DM zone, thereby contributing to higher DM use for trade invoicing, whereas Asia-Oceania countries belonged mainly to the U.S. dollar zone, leading to a lower degree of yen use. We also find that major currency countries tend to invoice their trade in their own currencies when they have a large presence in international trade and high levels of per capita income, and when their financial markets are more developed and at the same time are sufficiently open. Furthermore, major currency countries with high trade shares with U.S. dollar zone countries tend to invoice their exports less in their own currencies. For China, its low level of per capita income and limited financial openness as well as the presence of the U.S. dollar bloc in Asia stand as a big challenge to the nation's ambition to promote the RMB as a major regional or global trade-invoicing currency. |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:16005&r=his |
| By: | Görges, Luise; Beblo, Miriam |
| Abstract: | We study a possible nurture effect of political systems on the evolution of gender differences in work preferences by exploiting the 41-year division of Germany and its reunification in 1990 as a natural experiment. We investigate whether disparate political and social systems produced different gender gaps in preferences with respect to work and specific job attributes (high income, promotion opportunities) as, e.g., the higher female labour force participation in the former German Democratic Republic (GDR) suggests. Based on the German General Social Survey (ALLBUS) in years 1991, 1998/2000 and 2010/2012, our analyses reveal substantial differences between East and West gender gaps in preferences for work directly after reunification and hardly any convergence over the following 20 years. Regarding job attributes, gender-specific preferences in 1991 do not differ between East and West regions. Until 2010, the gaps vanish in the East but remain stable, or even widen, in the West. Cohort analyses confirm that the effect is driven by respondents who lived their adolescence in separated Germany. Accordingly, our results provide strong evidence for the impact of nurture on preference formation, while age and length of exposure are important determinants of the extent of such impact. |
| JEL: | C21 J24 P50 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112825&r=his |