Showing papers in "Journal of Economic Growth in 2016"
TL;DR: In this article, a strong positive relationship between natural resource exports and urbanization in a sample of 116 developing nations over the period 1960-2010 was found. But, although the development literature often assumes that urbanization is synonymous with industrialization, patterns differ markedly across developing countries.
Abstract: We document a strong positive relationship between natural resource exports and urbanization in a sample of 116 developing nations over the period 1960–2010. In countries that are heavily dependent on resource exports, urbanization appears to be concentrated in “consumption cities” where the economies consist primarily of non-tradable services. These contrast with “production cities” that are more dependent on manufacturing in countries that have industrialized. Consumption cities in resource exporters also appear to perform worse along several measures of welfare. We offer a simple model of structural change that can explain the observed patterns of urbanization and the associated differences in city types. We note that although the development literature often assumes that urbanization is synonymous with industrialization, patterns differ markedly across developing countries. We discuss several possible implications for policy.
452 citations
TL;DR: The authors proposed an index of population diversity based on people's birthplaces and decompose it into a size (share of immigrants) and a variety (diversity of immigrants), showing that the diversity of immigrants relates positively to measures of economic prosperity.
Abstract: We propose an index of population diversity based on people’s birthplaces and decompose it into a size (share of immigrants) and a variety (diversity of immigrants) component. We show that birthplace diversity is largely uncorrelated with ethnic, linguistic or genetic diversity and that the diversity of immigrants relates positively to measures of economic prosperity. This holds especially for skilled immigrants in richer countries at intermediate levels of cultural proximity. We address endogeneity by specifying a pseudo-gravity model predicting the size and diversity of immigration. The results are robust across specifications and suggestive of skill-complementarities between immigrants and native workers.
403 citations
TL;DR: In this article, the effect of place-based industrial policy on economic development, focusing on the establishment of Special Economic Zones (SEZ) in China, was studied. But the authors did not consider the impact of SEZ on neighboring regions or cities further away.
Abstract: We study the effect of place-based industrial policy on economic development, focusing on the establishment of Special Economic Zones (SEZ) in China. We use data from a panel of Chinese (prefecture-level) cities from 1988 to 2010. Our difference-in-difference estimation exploits the variation in the establishment of SEZ across time and space. We find that the establishment of a state-level SEZ is associated with an increase in the level of GDP of about 20 %. This finding is confirmed with alternative specifications and in a sub-sample of inland provinces, where the selection of cities to host the zones was based on administrative criteria. The main channel is a positive effect on physical capital accumulation, although SEZ also have a positive effect on total factor productivity and human capital investments. We also investigate whether there are spillover effects of SEZ on neighboring regions or cities further away. We find positive and often significant spillover effects.
168 citations
TL;DR: This article found that any adverse effects of extractive institutions associated with small European settlements were, even at low levels of colonial European settlement, more than offset by other things that Europeans brought, such as human capital and technology.
Abstract: Although a large literature argues that European settlement outside of Europe during colonization had an enduring effect on economic development, researchers have been unable to assess these predictions directly because of an absence of data on colonial European settlement. We construct a new database on the European share of the population during colonization and examine its association with economic development today. We find a strong, positive relation between current income per capita and colonial European settlement that is robust to controlling for the current proportion of the population of European descent, as well as many other country characteristics. The results suggest that any adverse effects of extractive institutions associated with small European settlements were, even at low levels of colonial European settlement, more than offset by other things that Europeans brought, such as human capital and technology.
146 citations
TL;DR: This paper examined the question of whether China was trapped within a Malthusian regime at a time when Western Europe had all but emerged from it by applying a difference-in-differences analysis to maize adoption in China from 1600 to 1910.
Abstract: We examine the question of whether China was trapped within a Malthusian regime at a time when Western Europe had all but emerged from it. By applying a difference-in-differences analysis to maize adoption in China from 1600 to 1910, we find that cultivation of this New World crop failed to raise per capita income. While maize accounted for a nearly 19 % increase in the Chinese population during 1776–1910, its effect on urbanization and real wages was not pronounced. Our results are robust to different sample selection procedures, to the control of variables pertinent to Malthusian “positive checks”, to different measures of economic growth and to data modifications. Our study thus provides rich empirical support to the claim that under the conditions in eighteenth- and nineteenth-century China, new agricultural technologies led to the Malthusian outcome of population growth without wage increases and urbanization.
63 citations
TL;DR: The authors showed that large frontier expansions may favor a political equilibrium among the colonizing agents that is biased toward the elite, creating the conditions for an inegalitarian society, with negative consequences for long-term economic development.
Abstract: This paper shows that a historical process that ended more than five centuries ago, the Reconquest, is very important to explain Spanish regional economic development down to the present day. An indicator measuring the rate of Reconquest reveals a heavily negative effect on current income differences across the Spanish provinces. A main intervening factor in the impact the Reconquest has had is the concentration of economic and political power in a few hands, excluding large segments of the population from access to economic opportunities when Spain entered the industrialization phase. The timing of the effect is consistent with this argument. A general implication of our analysis is that large frontier expansions may favor a political equilibrium among the colonizing agents that is biased toward the elite, creating the conditions for an inegalitarian society, with negative consequences for long-term economic development.
54 citations
TL;DR: In this article, the authors present new evidence about the relationship between military conflict and city population growth in Europe from the fall of Charlemagne's empire to the start of the Industrial Revolution.
Abstract: We present new evidence about the relationship between military conflict and city population growth in Europe from the fall of Charlemagne’s empire to the start of the Industrial Revolution. Military conflict was a main feature of European history. We argue that cities were safe harbors from conflict threats. To test this argument, we construct a novel database that geocodes the locations of more than 800 conflicts between 800 and 1799. We find a significant, positive, and robust relationship that runs from conflict exposure to city population growth. Our analysis suggests that military conflict played a key role in the rise of urban Europe.
41 citations
TL;DR: In this article, the authors explored exogenous sources of variations in land productivity across countries and found that lower levels of land productivity in the past are associated with more intense cooperation and higher levels of contemporary social capital and development.
Abstract: This research advances the hypothesis that natural land productivity in the past, and its effect on the desirable level of cooperation in the agricultural sector, had a persistent effect on the evolution of social capital, the process of industrialization and comparative economic development across the globe. Exploiting exogenous sources of variations in land productivity across (a) countries; (b) individuals within a country, (c) migrants of different ancestry within a country, and (d) individuals residing in regions within a country, the research establishes that lower level of land productivity in the past is associated with more intense cooperation and higher levels of contemporary social capital and development.
36 citations
TL;DR: In this article, the authors identify the expected value of the floor as a weighted mean of observed consumptions for the poorest stratum and show that the estimated floor is about half the $1.25 a day poverty line.
Abstract: Traditional assessments of economic growth and progress against poverty tell us little about whether the poorest are being left behind—whether the consumption floor is rising above the biological minimum. To address this deficiency, the paper identifies the expected value of the floor as a weighted mean of observed consumptions for the poorest stratum. Under the identifying assumptions and using data for the developing world over 1981–2011, the estimated floor is about half the $1.25 a day poverty line. Economic growth and social policies have delivered only modest progress in raising the floor, despite overall growth and progress in reducing the number living near the floor.
29 citations
TL;DR: This paper found that Protestantism is associated with a significantly higher propensity for entrepreneurship than Catholicism, and the estimated difference ranges between 1.5 and 3.2% points, it is larger the smaller the size of the religious minority and it is mainly driven by prime age male entrepreneurs.
Abstract: Does Protestantism favour entrepreneurship more than Catholicism does? We provide a novel way to answer this question by comparing Protestant and Catholic minorities using Swiss census data. Exploiting the strong adhesion of religious minorities to their denomination’ ethical principles and the historical determination of the geographical distribution of denominations across Swiss cantons, we find that Protestantism is associated with a significantly higher propensity for entrepreneurship. The estimated difference ranges between 1.5 and 3.2 % points, it is larger the smaller the size of the religious minority, it is mainly driven by prime age male entrepreneurs and it stands up to a number of robustness checks. No effects are found when comparing religious majorities, suggesting that the implications of religious ethical norms on economic outcomes emerge only when such norms are fully internalized.
22 citations
TL;DR: In this paper, the authors propose a novel theory based on health and aging to explain the long-run trends of longer schooling and shorter working life in the US and other developed countries, and calibrate the model and show that it is able to predict the historical trends of schooling and retirement.
Abstract: Workers in the US and other developed countries retire no later than a century ago and spend a significantly longer part of their life in school, implying that they stay less years in the work force. The facts of longer schooling and simultaneously shorter working life are seemingly hard to square with the rationality of the standard economic life cycle model. In this paper we propose a novel theory, based on health and aging, that explains these long-run trends. Workers optimally respond to a longer stay in a healthy state of high productivity by obtaining more education and supplying less labor. Better health increases productivity and amplifies the return on education. The health accelerator allows workers to finance educational efforts with less forgone labor supply than in the previous state of shorter healthy life expectancy. When both life-span and healthy life expectancy increase, the health effect is dominating and the working life gets shorter if the intertemporal elasticity of substitution for leisure is sufficiently small or the return on education is sufficiently large. We calibrate the model and show that it is able to predict the historical trends of schooling and retirement.
TL;DR: In this article, a semi-parametric technique for class categorization without resort to arbitrarily specified frontiers is proposed and the convergence of classes and mobility between them is studied in the context of the size distribution of per capita GDP of nations.
Abstract: There is a long-established practice in the empirical growth and convergence literature of classifying countries into groups or clubs by arbitrarily specifying group boundaries. A problem with this approach is that determining boundaries in a particular fashion also determines the nature of the group in a way that is often prejudicial for analysis ultimately affecting the way transition and class mobility behavior is evaluated. Here a semi-parametric technique for class categorization without resort to arbitrarily specified frontiers is proposed and the convergence of classes and mobility between them is studied in the context of the size distribution of per capita GDP of nations. Category membership is partially determined by the commonality of observed behavior of category members: partial in the sense that only the probability of category membership in each category is determined for each country. Such an approach does not inhibit the size of classes or the nature of transitions between them. A study of the world distribution over the 40 years preceding 2010 reveals substantial changes in class sizes and mobility patterns between them which are very different from those observed in a fixed class size analysis.