Zusammenfassung:
Why did enduring socio-economic inequality emerge between the 4th and 3rd millennium BCE, after millennia of substantial egalitarianism? We test the hypothesis of inequality being a by-product of state formation in an archeological panel covering Southern Iraq between 3900 and 1900 BCE. We implement a difference-in-differences design that compares areas that became part of a state in the first half of the 3rd millennium, during the first phase of substantial state expansion, with the rest of the a rea. State formation led to a persistent increase in socio-economic inequality over the following millennium in the form of labor specialization, income inequality and slavery. Early states protected trade and property rights, which led to the early increase in income inequality which then crystallized into persistent socioeconomic differences as captured by slavery.