Research
I study the long run evolution and the causes of socio-economic inequalities, combining microeconometric methods with historical data. My current research focuses on the long run development of wealth inequality and poverty in Europe and Germany, from the Black Death in the 14th century until the Industrial Revolution in the 19th century. I try to find answers to a major puzzle in economic history: why was economic inequality already high when industrialisation and modern economic growth began?
Publications
Urban Political Structure and Inequality: Political Economy Lessons from Early Modern German Cities. The Journal of Economic History, 84 (2), 2024.
What was the impact of urban political structure on preindustrial wealth inequality? I document that more closed political institutions were associated with higher inequality in a panel of early-modern German cities. To investigate the mechanisms behind that macro-relationship, I construct a unique individual-level panel-dataset on personal wealth and political office-holding in the city-state of Nördlingen (1579-1700). I employ a difference-in-differences setting to show that political elites enriched themselves substantially, increasing inequality. To address endogeneity concerns, I exploit the Thirty-Years' War as a shock to elites' potential for enrichment from public office. Officials manipulated this crisis to enrich themselves further.
(Paper available here)
Warfare and Economic Inequality: Evidence from Preindustrial Germany (c.1400-1800). Explorations in Economic History, 89 (2), 2023.
What was the impact of military conflict on economic inequality? I argue that ordinary military conflicts increased local economic inequality. Warfare raised the financial needs of communities in preindustrial times, leading to more resource extraction from the population. This resource extraction happened via inequality-promoting channels, such as regressive taxation. Only in truly major wars might inequality-reducing destruction outweigh inequality-promoting extraction and reduce inequality. To test this argument I construct a novel panel dataset combining information about economic inequality in 75 localities, and more than 700 conflicts over four centuries. I find that the many ordinary conflicts — paradigmatic of life in the preindustrial world — were continuous reinforcers of economic inequality. I confirm that the Thirty Years’ War was indeed a great equaliser, but this was an exception and not the rule. Rising inequality is an underappreciated negative externality in times of conflict.
(Paper available here)
Economic Inequality in Preindustrial Germany: ca. 1300 - 1850 (with Guido Alfani and Victoria Gierok). The Journal of Economic History, 82 (1), 2022.
This article provides an overview of wealth inequality in Germany during 1300-1850, introducing a novel database. We document four alternating phases of inequality decline and growth. The Black Death (1347-1352) led to inequality decline, until about 1450. Thereafter, inequality rose steadily. The Thirty Years’ War (1618-1648) and the 1627-1629 plague triggered a second phase of inequality reduction. This distinguishes Germany from other European areas where inequality grew monotonically. Inequality growth resumed from about 1700, well before the Industrial Revolution. Our findings offer new material to current debates on the determinants of inequality change in western societies, past and present.
Working Papers
The Unequal Spirit of the Protestant Reformation? Particularism and Wealth Distribution in Early Modern Germany. European Historical Economics Society Working Paper Nr. 239, 2023. Revise & Resubmit (minor revisions) at The Journal of Economic Growth.
This paper studies the impact of the Protestant Reformation on wealth distribution and inequality in confessionally divided Germany, between 1400 and 1800. The Reformation expanded social welfare, but provided it in a particularistic way to insiders only. This gave Protestantism an ambiguous character in terms of redistribution and its impact on inequality. I develop a theoretical framework of this trade-off, and test its implications empirically, using a Difference-in-Differences and an Instrumental Variable strategy. In line with the theoretical framework, I document that the Reformation exacerbated inequality overall, by making marginal poor people relatively poorer. The result is driven by the introduction of new particularistic poor relief policies in Protestant communities. The inegalitarian character of Protestantism, typically found in contemporary societies, can be traced back to the beginning of the Reformation in the sixteenth century.
(Paper available here)
Poverty, inequality and inequality extraction: Germany from the Black Death until the beginning of industrialization (with Guido Alfani and Victoria Gierok). Conditionally accepted at Explorations in Economic History.
This paper is the first to present macro-level estimates of poverty in preindustrial Germany, between the Black Death and the Industrial Revolution. Based on a new body of evidence we show that poverty declined after the Black Death and the Thirty Years’ War, increased massively in the sixteenth century, and grew modestly in the eighteenth and early nineteenth centuries. This pattern is broadly in line with a Malthusian model of the preindustrial economy. In 1600, poverty and inequality extraction were at a historical peak, at the same time when social conflict erupted in Germany. We find evidence that poverty was highest in more populous localities, in cities and in places that were exposed to warfare.
(Manuscript available upon request: felix.schaff@eui.eu)