Job Market Paper

["The consequences of a trade collapse: Economics and politics in Weimar Germany", with Giovanni Facchini, [draft][slides]. 

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. 

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 Effect of Recent Technological Change on U.S. Immigration Policy: Evidence from Congressional Roll Call Votes" CesIfo Working Paper No.9302 [PDF][WP] Revise & Resubmit at the Journal of Economic Behavior & Organization

Abstract: Did recent technological change, in the form of automation, affect immigration policy in the United States? I argue that as automation shifted employment from routine to manual occupations at the bottom end of the skill distribution, it increased competition between natives and immigrants, consequently leading to increased support for restricting low-skill immigration. I formalise this hypothesis theoretically in a partial equilibrium model with constant elasticity of substitution in which technology leads to employment polarization, and policy makers can vote on immigration legislation. I empirically evaluate these predictions by analysing voting on low-skill immigration bills in the House of Representatives during the period 1973-2014. First, I find evidence that policy makers who represent congressional districts with a higher share of manual employment are more likely to support restricting low-skill immigration. Second, I provide empirical evidence that representatives of districts which experienced more manual biased technological change are more likely to support restricting low-skill immigration. Finally, I provide evidence that automation did not affect trade policy, which is in line with automation having increased employment in occupations exposed to low-skill immigration, but not those exposed to international trade.

"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.  

"Property Rights and Technological Inertia: Evidence from the Electrification of Switzerland", with Jacob Weisdorf, [draft available on request] 

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. 

"The death of king coal: Industrial decline during childhood and lifetime well-being", with Valeria Rueda [draft available on request][EHS-Summary]  Abstract: This paper studies the effect of growing up in times of industrial decline on individual health development throughout life. We measure the effect of Britain's coal mining industry decline on the health of individuals born in mining counties. Exploiting data from the two fist cohorts of the UK Longitudinal Studies (1958 and 1970), we observe that mine closures during the age 0-10 lead to lower height throughout a person's life, and lower weight and worse health during childhood. We do not observe this effect to be stronger in families in which the father is a miner. A plausible mechanism for the worse anthropometric outcomes is the general economic hardship experienced in the local area during childhood. Fathers from all occupations are indeed more likely to be unemployed during the individual's early childhood where mines close. The longitudinal nature of our data allows us to overcome a number of key empirical challenges in evaluating the effect over an individual's lifetime. This includes accounting for general differences in local economic development patterns, and family characteristics that have an effect only at later stages of life as well as out-migration from areas affected by the mine closures. Not accounting for these empirical challenges leads to a considerable overestimation of the negative consequences of coal mine closures during early childhood.

"Artificial Intelligence and the Clustering of Human Capital: The Risks for Europe", ECIPE Occasional paper No. 5/2023 [full research version coming soon], with Erik van der Marel

Abstract: We document the key role of human capital and, especially, highly clustered human capital in the adoption of new AI technologies across European countries and industries. For this we use newly released detailed data from Eurostat that measures different types of AI adoption across European country-industry cells. Human capital in the form of the share of university graduates explains 34.5% of AI adoption across country-industry cells. The effect is particularly pronounced for the most advanced forms of AI, namely those AI technologies that automate different workflows and assist in decision making as well as those that enable physical movement of machines via autonomous decisions based on observation of surroundings. In contrast, there is little difference in the adoption in off the shelf AI technologies like text mining and speech recognition.

Selected Work in Progress 

"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.

"Supporting independence: Political connections and import substitution in India" with Roberto Bonfatti and Cyril Thomson [data collected]

 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]