Final Report Summary - HISTORICALDATABASE (The Swedish historical database project)
In this project, we have analyzed a number of questions related to Sweden's economic development with our newly collected historical data. Below we describe the various projects in more detail.
In one paper, we analyze how a suffrage reform in 1862/63 that shifted the de jure distribution of political power from landowners to industrialists affected Sweden’s industrialization and economic and social development from the 1860s to the 1910s. Using a newly constructed, comprehensive historical data set of the universe of approximately 2,400 Swedish local governments, we document that the change in suffrage affected a very large number of development and social outcomes at the local level, such as labor coercion, factor price manipulation in the form of entry barriers including investments in local public goods (i.e. schooling) and transportation (i.e. local railways), the real wage structure, technology adoption in both agriculture and industry, labor productivity in both agriculture and industry, changes in the composition of employment and the structure of production, demographic transition, organized labor, and persistence in dysfunctional local political institutions. Our findings are consistent with the idea that political institutions are a key determinant of long-run development and growth. Specifically, our results suggest that politically powerful landowners can block economic development by using labor coercion and factor price manipulation, i.e. using entry barriers and other distortionary policies.
In another paper, we analyze how a weighted voting system introduced in 1862, which shifted the distribution of political power from landowners to industrialists at local town meetings, affected investments in local public education. We use an event study design based on a newly constructed panel data set with annual observations of nearly 2,200 Swedish local governments over 28 years, i.e. more than 60,000 observations. Most importantly, there is no pre-trend in educational spending in our event study but rather a sharp change in the dynamic treatment effects exactly at the date when the treatment occurs, i.e. when industrialists receive more political power at town meetings. The estimated cumulative treatment effect is also economically substantial. For example, per capita spending on education increased by approximately 37% within 6 years in local governments where industrialists came to political power. Our findings are therefore consistent with the idea that political institutions are a key determinant of human capital accumulation and long-run economic development.
In another paper, we analyze effect of switching from communal to private land rights on economic development using data on the universe of nearly 40,000 Swedish land reforms during the period 1828-1927. Perhaps surprisingly, we find that a switch from communal to private property rights only had a very small effect on broad set of development outcomes including population growth, mortality, infant mortality, fertility, in and outmigration, land prices. One potential explanation for our findings is that the land reform also had a negative effect on agricultural farms size, which may reduce agricultural productivity if there are economies of scale effects.
In another paper, we analyze the effect of local investments in railways on economic activity. Specifically, we analyze the decisions of Swedish local governments to build local railways in the period 1862-1908. It is well-known fact that the annual Swedish investments in railways were very extremely large since they often constituted more 1% of GDP during this period but could be even as high as 8%. A less-known fact is that 75% of the Swedish railway network were built and financed by local governments via limited liability companies Indeed, 800 out of about 2,400 local governments had their own local railway in 1910. Moreover, Sweden had a very large and dense railway network before the First World War despite that it started to build railways in the mid-1850s. For example, Sweden had 25 km of railroad for every 10,000 people, which was more than twice the amount for any other European country, and only U.S. Canada, Australia and Argentina had more railways in the world. We find that investments in local railways had a very large effect on non-agricultural local activity (i.e. the increase in real non-agricultural income was 50%) while they had no impact on local land prices.
In another paper, we estimate the causal effect of a historical midwifery policy experiment on maternal mortality, infant mortality, and stillbirth during the period 1830--1894 in Sweden. Exploiting sharp changes or ``discontinuities'' across time and place in the availability of trained and licensed midwives as an exogenous source of variation, we find that a doubling of trained midwives leads to a 20--40 percent reduction in maternal mortality and to a 20 percent increase in the uptake of midwife-assisted homebirths. The results thus suggest that a 1 percent increase in the share of midwife-assisted homebirths decreases maternal mortality by as much as 2 percent, which is a remarkable finding given that midwife training was only 6--12 months at that time. The results of this study contribute to the current debate about the most effective strategy to reduce the unacceptably high rate of maternal mortality in many developing countries, especially in low-resource settings.
In one paper, we analyze how a suffrage reform in 1862/63 that shifted the de jure distribution of political power from landowners to industrialists affected Sweden’s industrialization and economic and social development from the 1860s to the 1910s. Using a newly constructed, comprehensive historical data set of the universe of approximately 2,400 Swedish local governments, we document that the change in suffrage affected a very large number of development and social outcomes at the local level, such as labor coercion, factor price manipulation in the form of entry barriers including investments in local public goods (i.e. schooling) and transportation (i.e. local railways), the real wage structure, technology adoption in both agriculture and industry, labor productivity in both agriculture and industry, changes in the composition of employment and the structure of production, demographic transition, organized labor, and persistence in dysfunctional local political institutions. Our findings are consistent with the idea that political institutions are a key determinant of long-run development and growth. Specifically, our results suggest that politically powerful landowners can block economic development by using labor coercion and factor price manipulation, i.e. using entry barriers and other distortionary policies.
In another paper, we analyze how a weighted voting system introduced in 1862, which shifted the distribution of political power from landowners to industrialists at local town meetings, affected investments in local public education. We use an event study design based on a newly constructed panel data set with annual observations of nearly 2,200 Swedish local governments over 28 years, i.e. more than 60,000 observations. Most importantly, there is no pre-trend in educational spending in our event study but rather a sharp change in the dynamic treatment effects exactly at the date when the treatment occurs, i.e. when industrialists receive more political power at town meetings. The estimated cumulative treatment effect is also economically substantial. For example, per capita spending on education increased by approximately 37% within 6 years in local governments where industrialists came to political power. Our findings are therefore consistent with the idea that political institutions are a key determinant of human capital accumulation and long-run economic development.
In another paper, we analyze effect of switching from communal to private land rights on economic development using data on the universe of nearly 40,000 Swedish land reforms during the period 1828-1927. Perhaps surprisingly, we find that a switch from communal to private property rights only had a very small effect on broad set of development outcomes including population growth, mortality, infant mortality, fertility, in and outmigration, land prices. One potential explanation for our findings is that the land reform also had a negative effect on agricultural farms size, which may reduce agricultural productivity if there are economies of scale effects.
In another paper, we analyze the effect of local investments in railways on economic activity. Specifically, we analyze the decisions of Swedish local governments to build local railways in the period 1862-1908. It is well-known fact that the annual Swedish investments in railways were very extremely large since they often constituted more 1% of GDP during this period but could be even as high as 8%. A less-known fact is that 75% of the Swedish railway network were built and financed by local governments via limited liability companies Indeed, 800 out of about 2,400 local governments had their own local railway in 1910. Moreover, Sweden had a very large and dense railway network before the First World War despite that it started to build railways in the mid-1850s. For example, Sweden had 25 km of railroad for every 10,000 people, which was more than twice the amount for any other European country, and only U.S. Canada, Australia and Argentina had more railways in the world. We find that investments in local railways had a very large effect on non-agricultural local activity (i.e. the increase in real non-agricultural income was 50%) while they had no impact on local land prices.
In another paper, we estimate the causal effect of a historical midwifery policy experiment on maternal mortality, infant mortality, and stillbirth during the period 1830--1894 in Sweden. Exploiting sharp changes or ``discontinuities'' across time and place in the availability of trained and licensed midwives as an exogenous source of variation, we find that a doubling of trained midwives leads to a 20--40 percent reduction in maternal mortality and to a 20 percent increase in the uptake of midwife-assisted homebirths. The results thus suggest that a 1 percent increase in the share of midwife-assisted homebirths decreases maternal mortality by as much as 2 percent, which is a remarkable finding given that midwife training was only 6--12 months at that time. The results of this study contribute to the current debate about the most effective strategy to reduce the unacceptably high rate of maternal mortality in many developing countries, especially in low-resource settings.