Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/244325
Authors: 
Bräuer, Richard
Hungerland, Wolf-Fabian
Kersting, Felix
Year of Publication: 
2021
Series/Report no.: 
Discussion Paper No. 285
Publisher: 
Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition, München und Berlin
Abstract: 
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 globalization (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, health outcomes or political polarization in counties aected by foreign competition. Our results suggest that the negative and persistent eects of trade shocks we see today are not a universal feature of globalization, but depend on labor mobility. For our analysis, we digitize 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.
Subjects: 
Globalization
import competition
labor market
agriculture
migration
trade shock
elections
Germany
Prussia
JEL: 
F14
F16
F66
F68
N13
R12
Document Type: 
Working Paper

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