Research

Publications

Working Papers

"Sparking knowledge: Early technology adoption, innovation ability and long-run growth", GEP Research Paper 2021/05  [PDF][WP];  Media: ECIPE-Podcast; EHS The Long Run Revise & Resubmit at the Journal of the European Economic Association

Abstract: This paper explores the effect of the early adoption of technology on local economic development. While timing and intensity of technology adoption are key drivers of economic divergence across countries, the initial impact of new technologies within advanced countries has been incredibly illusive. Resolving this puzzle, this paper documents that the early adoption of electricity across Switzerland was conducive to local economic development not just in the short-run, but also in the long-run. Exploiting exogenous variation in the potential to produce electricity from waterpower, this paper finds that electricity adoption at the end of the 19th century led to local differences in structural transformation. However, despite access to electricity becoming quickly universal in the early 20th century, due to the expansion of the electricity grid, economic development did not converge across areas. Instead, areas which adopted electricity early continue to be more industrialized and have higher incomes today. In particular, the geographical distribution of the newly emerging and innovative chemical industry was shaped by early electricity adoption, while employment gains through the building and operation of new power plants themselves were mostly short-lived. The main mechanism through which differences in economic development persist in the long-run is through increased human capital accumulation and innovation, rather than persistent differences in the way electricity is used.

"The consequences of a trade collapse: Economics and politics in Weimar Germany", with Giovanni Facchini, CEPR Working Paper DP19383 [WP] Submitted. 

Abstract: What are the political consequences of de-globalization? We address this question in the context of Weimar Germany, which experienced a 67% decline in exports between 1928-1932. During this period, the Nazi party vote share increased from 3% to 37%. Using newly digitized data, we show that this surge was not driven by the direct effects of the export decline in manufacturing areas. At the same time, trade shock-induced declines in food prices spread economic hardship to rural hinterlands. We document that this indirect effect and the pro-agriculture policies put forward by the Nazis are instead key to explain their electoral success.

"Panic politics on the US West Coast", with Nicolas Berman and Jérémy Laurent-Lucchetti, CEPR Working Paper DP17874  [PDF][WP] Submitted

Abstract: This study highlights that even individual incidents of conflict causing negligible damage can have considerable political consequences. Using the distance to the Ellwood bombardment, the only shelling of civilian installations on the US mainland during WW2, we find that in counties nearer the incident support for the right-wing Republican challenger increased in the 1942 California gubernatorial election. The location of the submarine attack along the California coast being random and the absence of observable pre-trends suggests that the estimated effect is causal. Further, there is no corresponding effect observed for the two attacks on non-civilian targets during WW2 (the bombardment of Fort Stevens an the Lookout Air Raids). There is a corresponding effect on presidential, house and senate results. The effect appears to persist for a considerable time even after WW2 ended.  

"The Death of King Coal and the Scars of Deindustrialization", with Valeria Rueda, CEPR Working Paper DP19082  [WP] Submitted. Media: VoxEU

Abstract: This paper investigates the human cost of industrial decline. We focus on the largest contraction of the coal industry in the UK. Using longitudinal data following two cohorts born in 1958 and 1970, we estimate the lifelong effects of being exposed to pit closures during childhood on health and economic outcomes. Those exposed to the shock as children have worse health throughout life, and this effect transmits over generations. They are also raised in less privileged economic conditions and accumulate less wealth as adults. We also uncover that migration is an imperfect mitigation strategy. The longitudinal data structure allows us to account for different trajectories in the effects across locations and cohorts. We also verify that outcomes are identical in levels before the shock. Results are robust to a battery of robustness checks. These findings highlight that in the absence of any support, industrial decline has long-lasting consequences imperfectly mitigated by access to better opportunities. Few people move, and those who do keep a scar. 

Selected Work in Progress 

"Property Rights and Technological Inertia: Evidence from the Electrification of Switzerland", with Jacob Weisdorf, [new draft coming soon] 

Abstract: Weak property protection is widely believed to discourage innovation and economic development. We offer an example of the opposing view, presenting evidence that strong property rights suited to existing technologies can obstruct the adoption of superior ones thus impeding economic growth. Our study examines the late 19th-century Swiss transition from traditional waterwheels to hydroelectric power. We use event-study and regression discontinuity designs to provide causal evidence of a regional reversal of fortune in energy production linked to territorial variation in strength of water-usage rights. The main mechanism for the detrimental effect of property rights is that there was a failure to cooperate to modernize energy generation towards more efficient new hydroelectric plants as it required consent from all individual owners. We further demonstrate how some Cantonal law-makers in regions of strong water rights resorted to policies akin to expropriation in order to counter this coordination failure. We document that areas affected by this reforms started to adopt more electricity and recover lost ground. Finally, we establish that the historic regulatory border on private water-usage rights still matters today using geo-coded employment data. Areas historically subject to strong property protection have lower population and manufacturing employment shares, while being more intensive in agriculture. Our findings indicate that strong property protection can have long-term detrimental effects in case where drastic technological changes occur and policy makers do not react to them. 

"Technological change and gender attitudes: Evidence from Switzerland", with Cecilia García Peñalosa and Edoardo Cefala [new draft coming soon]  

Abstract: Gender equality and economic growth have historically tended to move together yet identifying causal effects has been difficult. This paper uses data on the support for female suffrage in Switzerland in order to explore the impact of technology adoption on gender norms.  We argue that the early adoption of electricity was conducive to local economic development, which in turn led to more egalitarian gender norms. We use data on the 1959 referendum to decide whether or not to give voting rights to women, arguing that voting shares at the municipality level capture men's attitudes to gender equality, i.e. norms. The potential for economic growth is measured by electricity adoption at the end of the 19th century, a local phenomenon in the absence of a national grid. To identify causality, we exploit exogenous variation in the potential to produce electricity, a strategy possible because electricity in Switzerland was mainly generated from waterpower. We find that a doubling of electricity adoption is leading to a 1.0 percentage point increase in the Yes-vote share in support of female voting rights. The likely mechanism for this is that as farmers left their socio-economic environment to work in factories, they were exposed to more liberal political ideas including female suffrage.

"Forbidden love: The impact of banning interracial marriages", with Jade Ponsard and Roberta Ziparo [presented] 

Abstract: The majority of US states enacted anti-miscegenation laws at varying points during the 19th and 20th century. These laws made interracial marriages ``prohibited and void'' making them a cornerstone policy of segregation. Exploiting variations in introduction and coverage we study how these laws shaped family structures and reinforced differences in economic outcomes across racial groups. To do this, we combined information on state-level anti-miscegenation laws with longitudinal data from the US censuses (1850-1940). This dataset allows us to follow more than 30 million men over time. Our preliminary results suggest that the implementation of anti-miscegenation laws changed the composition of marriages and increased out-of-state migration of individuals targeted by the laws, in particular individuals in mixed marriages, but also Black men overall. Moreover, codifying race was a key necessity to enforce interracial marriage bans so that miscegenation laws included the blood purity rules. In line with this, we find that racial identity changes of initially Black individuals, a non-negligible phenomenon, declined when miscegenation laws were introduced. Further preliminary explorations suggest that this also had an impact on keeping an exploitative agricultural economic model in place.

“The inter-generational transmission of experiences: The Great Famine, migration and contemporary attitudes”, with Joanne Haddad and Lamis Kattan [presented] 

Abstract: This paper shows that present-day differences in ethnic self-identification and political attitudes in Ukraine can be traced back to the 1932--1933 Soviet Great Famine. Combining contemporary individual-level survey data with historical data on famine deaths rates, we document that individuals who come from areas heavily exposed to the famine are more likely to self-identify as Ukrainian and less likely to hold Russian passports or speak the Russian language. Examining channels of persistence, we find that the effect is mostly associated with growing up in an area rather than parents or grandparents originating from areas exposed to the famine. We are able to explore a large variety of socio-cultural questions in our data further documenting that while individuals do not vary in their economic behavior, they hold different religious value and views on important historical personalities and events.

"From British Raj to Licence Raj: Trade Disruption and the Rise of the Industrial Lobby in India" with Roberto Bonfatti and Cyril Thomson [presented]

 Abstract: In this paper we document the value of political connections and how they were shaped in a post-colonial setting. We find that profits of firms that had directors connected to the Indian National Congress experience a sudden skyrocketing of profits after Indian independence. One of the main mechanism we explore for this effect is the role of the newly implemented import licensing policy. We further analyze how political connections were shaped by WWI leading to the formation of a new Indian industrial elite that had benefited from the temporary decline in import competition.

"Swiss folklore: A dataset of historical economic, legal and cultural practices" with Paula Gobbi [data collection in progress]

Abstract: We are constructing a detailed historic dataset of more than two hundred economic, legal and cultural practices covering 387 municipalities from across all of Switzerland. One of the most interesting features of our data collection is that it provides detailed information on seasonal migration patterns and trade flows within Switzerland. 

General Audience

Podcasts: 

The long-term effects of technology on economic growth, ECIPE episode 83, June 2022, hosted by Erik van der Marel

Articles:

Trade, industrialization and support for anti-colonial movements, E-International relations, August 2020, with Roberto Bonfatti 

World War I and industrialization in British India, Ideas for India, May 2020, with Roberto Bonfatti 

Artificial Intelligence and the Clustering of Human Capital: The Risks for Europe, ECIPE, December 2023, with Frederik Erixon and Erik van der Marel [Blog][Summary][Policy Report]