Developing Talent
The Allocation of Talent and Financial Development, 1897 to 1936
Chen Lin et al.
Management Science, forthcoming
Abstract:
We examine how the supply of talent affected financial development based on an experiment that abruptly changed the allocation of talent in historical China. Under the meritocratic civil examination system, government service was the main employment for the Chinese intellectuals. The abolition of this system in 1905 reduced the status and wealth attached to government service, which led the intellectuals to turn to modern banking as a high-status sector of employment. We find that regions where there were more candidates for the civil examination produced more financial professionals after 1905, which translated to a greater development of modern banking.
Babies and the Macroeconomy
Claudia Goldin
NBER Working Paper, December 2024
Abstract:
Fertility levels have greatly decreased in virtually every nation in the world, but the timing of the decline has differed even among developed countries. In Europe, Asia, and North America, total fertility rates of some nations dipped below the magic replacement figure of 2.1 as early as the 1970s. But in other nations, fertility rates remained substantial until the 1990s but plummeted subsequently. This paper addresses why some countries in Europe and Asia with moderate fertility levels in 1980s, have become the "lowest-low" nations today (total fertility rates of less than 1.3), whereas those that decreased earlier have not. Also addressed is why the crossover point for the two groups of nations was around the 1980s and 1990s. An important factor that distinguishes the two groups is their economic growth in the 1960s and 1970s. Countries with "lowest low" fertility rates today experienced rapid growth in GNP per capita after a long period of stagnation or decline. They were catapulted into modernity, but the beliefs, values, and traditions of their citizens changed more slowly. Thus, swift economic change may lead to both generational and gendered conflicts that result in a rapid decrease in the total fertility rate.
The Economy, the Ghost in Your Gene, and the Escape from Premature Mortality
Dora Costa et al.
NBER Working Paper, January 2025
Abstract:
Explanations for the West's escape from premature mortality have focused on chronic malnutrition or income and on public health or state capacity. We argue that by ignoring the multigenerational effects of variance in ancestors' harvests, we are underestimating the contribution of modern economic growth to the escape from early death at older ages. Using a newly constructed multigenerational dataset for Sweden, we show that grandsons' longevity was strongly linked to spatial shocks in paternal grandfathers' yearly harvest variability when agricultural productivity was low and market integration was limited. We reason that an epigenetic mechanism is the most plausible explanation for our findings. We posit that the removal of trade barriers, improvements in transportation, and agricultural innovation reduced harvest variability. We contend that for older Swedish men (but not women) born 1830-1909 this reduction was as important as decreasing contemporaneous infectious disease rates and more important than eliminating exposure to poor harvests in-utero.
CEO-Firm Matches and Productivity in 42 Countries
Amanda Dahlstrand et al.
NBER Working Paper, January 2025
Abstract:
Firms are key to economic development, and CEOs are key to firm productivity. Are firms in countries at varying stages of development led by the right CEOs, and if not, why? We develop a parsimonious measure of CEO time use that allows us to differentiate CEOs into "leaders" and "managers" in a survey of 4,800 manufacturing firms across 42 countries, with income per capita ranging from USD 4,000 to 45,000. We find that poorer countries have fewer leaders and relate this to training opportunities. Even when suitable leaders are available, they often do not lead the firms that would benefit the most, resulting in mismatches that can cause up to a 20% loss in productivity for the mismatched firms. The findings imply that policies that address the causes of mismatch could significantly enhance growth without additional resources.
Can norm-based information campaigns reduce corruption?
Aaron Erlich & Jordan Gans-Morse
American Journal of Political Science, forthcoming
Abstract:
Can norm-based information campaigns reduce corruption? Such campaigns use messaging about how people typically behave (descriptive norms) or ought to behave (injunctive norms). Drawing on survey and lab experiments in Ukraine, we unpack and evaluate the distinct effects of these two types of social norms. Four findings emerge: First, injunctive-norm messaging produces consistent but relatively small and temporary effects. These may serve as moderately effective, low-cost anti-corruption tools but are unlikely to inspire large-scale norm transformations. Second, contrary to recent studies, we find no evidence that either type of norm-based messaging "backfires" by inadvertently encouraging corruption. Third, descriptive-norm messages emphasizing corruption's decline produce relatively large and long-lasting effects -- but only among subjects who find messages credible. Fourth, both types of norm-based messaging have a substantially larger effect on younger citizens. These findings have broader implications for messaging campaigns, especially those targeting social problems that, like corruption, require mitigation of collective action dilemmas.
The Impact of the Black Death on the Adoption of the Printing Press
Noel Johnson, Andrew Thomas & Alexander Taylor
George Mason University Working Paper, November 2024
Abstract:
We leverage plausibly exogenous variation in mortality from the Black Death (1347-52) across European cities to estimate the causal impact of market size on early print adoption. Using the universe of data from the Universal Short Title Catalogue we create a database linking early European printed material to historical city populations. We find that cities whose populations were more heavily impacted by the Black Death were less likely to be early adopters of the press and printed fewer unique book editions. We also provide evidence that beyond own-city mortality there were also spatial spillovers from the Black Death shock.
Transport and urban growth in the First Industrial Revolution
Eduard Alvarez-Palau et al.
Economic Journal, forthcoming
Abstract:
The Industrial Revolution led to dramatic economic changes which persist to the present. This paper focuses on urban areas in England and Wales, the birthplace of the First Industrial Revolution, and the role of early transport improvements, like improving rivers and roads, building canals, and reducing sailing costs. We estimate how much inter-urban freight transport costs declined from all such innovations between 1680 and 1830 using a new multi-modal transport model. We find that relative to producer prices, transport costs declined by nearly 75%. We then estimate how lower trade costs led to significantly higher urban population through increased market access. Our empirical strategy addresses confounding factors and potential endogeneity. A counterfactual suggests that without any change in the ratio of transport costs to producer prices between 1680 and 1830, the population in 1841 would have been more coastal and inland towns would have been 20 to 25% smaller. In extensions, we show that levels of market access in 1830 had persistent, positive effects on urban population up to 1911. It also led to significantly higher property income, more migration, and fewer unskilled occupations by the mid-nineteenth century. Broadly, early transport improvements significantly shaped the spatial structure of urban economies during the First Industrial Revolution and beyond.