Growth Transitions
Malthusian Migrations
Guillaume Blanc & Romain Wacziarg
NBER Working Paper, March 2025
Abstract:
For most of human history, until the fertility transition, technological progress translated into larger populations, preventing sustained improvements in living standards. We argue that migration offered an escape valve from these Malthusian dynamics after the European discovery and colonization of the Americas. We document a strong relationship between fertility and migration across countries, regions, individuals, and periods, in a variety of datasets and specifications, and with different identification strategies. During the Age of Mass Migration, persistently high fertility across much of Europe created a large reservoir of surplus labor that could find better opportunities in the New World. These migrations, by relieving demographic pressures, accelerated the transition to modern growth.
How Poverty Fell
Vincent Armentano, Paul Niehaus & Tom Vogl
University of California Working Paper, March 2025
Abstract:
The share of the global population living in extreme poverty fell dramatically from an estimated 44% in 1981 to 9% in 2019. We describe how this happened: the extent to which changes within as opposed to between cohorts contributed to poverty declines, and the key changes in the lives of households as they transitioned out of (and into) poverty. We do so using cross-sectional and panel sources that are representative or near-representative of countries that collectively accounted for 70% of global poverty decline since 1990. The repeated cross-sections show that all birth cohorts experienced the decline of poverty over time in parallel, such that poverty decline can be viewed as a primarily within-cohort phenomenon. The panels show substantial within-cohort churn: gross transitions out of poverty were much larger than net changes, as many households also lapsed back into poverty. The overall picture is of a “slippery slope” rather than a long-term trap. The role of sectoral transitions varied across countries, though progress within sectors generally played a larger role than transitions between sectors.
America’s Rise in Human Capital Mobility
Lukas Althoff, Harriet Brookes Gray & Hugo Reichardt
Stanford Working Paper, February 2025
Abstract:
How did the US become a land of opportunity? We show that the country’s pioneering role in mass education was key. Unlike previous research, which has focused on father-son income correlations, we incorporate both parents in a new measure of intergenerational mobility that considers multiple inputs, including mothers’ and fathers’ human capital. To estimate mobility despite limitations in historical data, we introduce a latent variable method and construct a representative linked panel that includes women. Our findings reveal that human capital mobility rose sharply from 1850 to 1950, driven by a declining reliance on maternal human capital, which had been most predictive of child outcomes before widespread schooling. Broadening schooling weakened this reliance on mothers, raising mobility in both human capital and income over time.
Decoding China's Industrial Policies
Hanming Fang, Ming Li & Guangli Lu
University of Pennsylvania Working Paper, December 2024
Abstract:
We decode China's industrial policies from 2000 to 2022 by employing Large Language Models (LLMs) to extract and analyze rich information from a comprehensive dataset of 3 million documents issued by central, provincial, and municipal governments. Through careful prompt engineering, multistage extraction and refinement, and rigorous verification, LLMs allow us to extract structured information on detailed policy dimensions, including context and scope, targeted industries, tools, implementation mechanisms, and intergovernmental relationships, etc. Combining these newly constructed industrial policy data with microlevel firm data, we document a list of facts about China's industrial policy that explore the following critical questions. Which industries are targeted and how does this align with local comparative advantage? What policy tools are deployed, and how does their use vary across different levels and regions of governments, as well as over the various phases of development of an industry? We also examine the impact of these policies on firm behavior, including entry, production, and productivity growth, and highlight the heterogeneous effects of different policy tools. In addition, we explore the political economy of industrial policy, focusing on top-down transmission mechanisms, policy diffusion, and persistence across regions. Finally, we document spatial inefficiencies and industry-wide overcapacity as potential downsides of industrial policies.
Inappropriate Technology: Evidence from Global Agriculture
Jacob Moscona & Karthik Sastry
NBER Working Paper, February 2025
Abstract:
An influential explanation for global productivity differences is that frontier technologies are adapted to the high-income countries that develop them and "inappropriate" elsewhere. We study this hypothesis in agriculture using data on novel plant varieties, patents, output, and the global range of crop pests and pathogens. Innovation focuses on the environmental conditions of technology leaders, and ecological mismatch with these markets reduces technology transfer and production. Combined with a model, our estimates imply that inappropriate technology explains 15-20% of cross-country agricultural productivity differences and re-shapes the potential consequences of innovation policy, the rise of new technology leaders, and environmental change.
The long-term implications of destruction during the Second World War on private wealth in Germany
Christoph Halbmeier & Carsten Schröder
Journal of Economic Growth, March 2025, Pages 161-235
Abstract:
By the end of the Second World War, an estimated 20% of the West German housing stock had been destroyed. Building on a theoretical life-cycle model, this paper examines the persistent consequences of the war for individual wealth across generations. As our empirical basis, we link a unique historical dataset on the levels of wartime destruction in 1739 West German cities with micro data on individual wealth at the beginning of the twenty-first century from the German Socio-Economic Panel. Among individuals born in cities or villages that were badly damaged during the Second World War, wealth is still about 10% lower today. Similarly, the destruction of parental birthplace has significant negative implications for the wealth of their descendants. These negative implications are robust after controlling for a rich set of pre-war regional and city-level control variables. In complementary empirical exercises, we study potential channels such as inheritances, health, and education, through which the wartime destruction could have affected wealth accumulation across generations.
Immunity Outsourcing in Atlantic Conquest and Extraction
Mark Shirk & Simon Frankel Pratt
Security Studies, Winter 2024, Pages 549-572
Abstract:
Disease was an important part of the creation and eventual decline of piracy in ways significant to the broader process of imperial conquest and extraction. By contracting military tasks to privateers and other third parties, seventeenth-century Atlantic empires avoided significant losses to their forces from disease. These practices of “immunity outsourcing” transferred the risk of disease to local agents, who had acquired immunity to malaria and yellow fever, the dominant pathogens of the era. We adopt an eco-centric view of the relationship between the environment and politics, approached as complex entanglements of human and nonhuman processes. Through counterfactual analysis, we show that the interrelation between disease and politics generated new alliances and interests, making immunity outsourcing untenable. Disease also contributed to the decision by England to shift from an extraction economy to a plantation-based economy, as it made sustained naval operations very costly. Thus, the end of immunity outsourcing practices also helps explain why privateers were no longer needed and subsequently became “pirates.” This paper has larger implications for discussions of imperialism and state formation, research into similar processes of geopolitical reconfiguration, and attempts to conceptualize twenty-first-century security challenges concerning ecology, risk, and state-building.
You’ve Got Mail! The Late 19th Century U.S. Postal Service Expansion, Firm Creation, and Firm Performance
Astrid Marinoni & Maria Roche
Management Science, forthcoming
Abstract:
This paper examines the impact of the expansion of the U.S. Postal Service in the late 19th century on firm creation and performance. Utilizing newly digitized archival data on historic business establishments, post office locations, and road networks in California, our study identifies a positive relationship between the expansion of the Postal Service and the emergence of new firms. To address endogeneity concerns, we leverage an unexpected change in the Postal Service route network. Our findings suggest that the Postal Service played a significant role in facilitating firm entry by acting as a carrier of specialized knowledge rather than as a financial service or mass communication infrastructure. We further reveal that, although increased competition from new entrants generally exerted downward pressure on incumbent firms, those relying on specialized knowledge and public technology inputs significantly benefited from local Postal Service access. Taken together, our study underscores the critical role played by the Postal Service in knowledge diffusion and local economic development by enabling the sourcing of specialized knowledge and technologies from other geographies. Overall, our results contribute to a broader understanding of how communication and knowledge dissemination infrastructure can drive entrepreneurship and firm growth, carrying important implications for contemporary discussions on infrastructure development, its potential to stimulate entrepreneurial activity, innovation, and foster local economic communities.