Trade shocks, labour markets and elections in the first globalisation

Arbeitspapier

This paper studies the economic and political effects of a large trade shock in agriculture - the grain invasion from the Americas - in Prussia during the first globalisation (1871-1913). We show that this shock accelerated the structural change in the Prussian economy through migration of workers to booming cities. In contrast to studies using today's data, we do not observe declining per capita income and political polarisation in counties affected by foreign competition. Our results suggest that the negative and persistent effects of trade shocks we see today are not a universal feature of globalisation, but depend on labour mobility. For our analysis, we digitise data from Prussian industrial and agricultural censuses on the county level and combine it with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian trade data to isolate exogenous variation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IWH-CompNet Discussion Papers ; No. 4/2021

Classification and Topics

• Classification: Wirtschaft ; Empirical Studies of Trade ; Trade and Labor Market Interactions ; Economic Impacts of Globalization: Labor ; Economic Impacts of Globalization: Policy ; Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: Europe: Pre-1913 ; Size and Spatial Distributions of Regional Economic Activity
• Subject: agriculture ; elections ; Germany ; globalisation ; import competition ; labour market ; migration ; Prussia ; trade shock

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bräuer, Richard ; Hungerland, Wolf-Fabian ; Kersting, Felix
• Event: Veröffentlichung
• (who): Leibniz-Institut für Wirtschaftsforschung Halle (IWH)
• (where): Halle (Saale)
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/243169
• URN: urn:nbn:de:gbv:3:2-142261
• Last update: 10.03.2025, 11:43 AM CET