Inclusive institutions and long-run misallocation

Arbeitspapier

This research advances the hypothesis that resource abundant economies characterized by a socially cohesive workforce and network externalities triggered the emergence of efficiency-enhancing inclusive institutions designed to restrict mobility and to enhance the attachment of community members to the local labor market. However, the persistence of these institutions, and the inter-generational transmission of their value, ultimately resulted in the misallocation of talents across occupations and a reduction in the long-run level of income per capita in the economy as a whole. Exploiting variation in resource intensity across the American Midwest during its initial development, the empirical analysis establishes that higher initial resource-intensity in 1860 is indeed associated with greater community participation over the subsequent 150 years, and reduced mobility and labor misallocation in the contemporary period.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2013-9

Classification and Topics

• Classification: Wirtschaft ; Health Behavior ; Fertility; Family Planning; Child Care; Children; Youth ; Economic Development: General
• Subject: Inclusive institutions ; Exclusive institutions ; Growth ; Networks ; Labor misallocation ; Persistence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Galor, Oded ; Munshiy, Kaivan ; Wilson, Nicholas
• Event: Veröffentlichung
• (who): Brown University, Department of Economics
• (where): Providence, RI
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/102628
• Last update: 21.04.2202, 9:45 AM CEST