Kisling, Meissner, and Xu introduce novel data on the near universe of international/cross-border banking activity during the fist age of globalization from 1850 to 1914 and show how these financial connections influenced patterns of trade. First, they describe the banking data and show that the distribution of countries 'exporting' banks is very skewed: the top four exporters are responsible for almost 80% of all multinational banks. Second, the researchers show that despite this skewness, there is a significant positive relationship throughout the distribution between an international banking connection and exports using a standard gravity framework. Kisling, Meissner, and Xu employ a number of techniques for their observational data to show that endogeneity is unlikely to be driving this effect. Third, the researchers discuss trade diversion, heterogeneity, and the impact of being in the international banking network.
This paper seeks to determine the role of market factors in the provision of non-discriminatory services before federal legislation forbade racial discrimination in public accommodations. Using a new county-level dataset constructed from the Negro Motorist Green Books on the number of non-discriminatory public accommodations from 1939 to 1955, Cook, Jones, Logan, and Rosé show that exogenous changes in the White population led to increases in non-discriminatory firms in the post-war era. To explore the role of consumer discrimination as the mechanism behind this result, the researchers present a model of firm discrimination where a fraction of White consumers have discriminatory preferences. The model captures the relationship between the ratio of Black to White consumers and the ratio of non-discriminatory to discriminatory firms in a local market. Using the number of White casualties in World War II as an instrument for the change in the Black to White population ratio, they isolate the effect of a change in the racial composition of consumers on the incentives for firms to discriminate. Cook, Jones, Logan, and Rosé find that a 1% increase in the ratio of Black to White consumers leads to a 2% increase in the ratio of non-discriminatory to discriminatory firms. While their results show that there were marginal firm responses to market conditions, ending racial discrimination in public accommodations required federal intervention.
Using variation in crop prices induced by large swings in demand surrounding World War I, Kitchens and Rodgers examine the fertility response to increases in crop revenues during the period 1910-1930. Their estimates from samples utilizing both complete count decennial census microdata and newly collected county-level data from state health reports indicate that a doubling of the agricultural price index reduced fertility by around 8 percent both immediately and in the years following the boom. The researchers further document that this effect was more pronounced in more agrarian areas and where the labor intensity of agriculture was more intense. Extensive robustness checks and analysis of potential mechanisms indicate that the decrease in fertility was driven by increased female opportunity costs, which dominated any household income effects resulting from the price boom.
Libecap, Fiszbein, and Edwards examine the origins, persistence, and economic consequences of institutional structures of agricultural production. The researchers compare farms in the Argentine Pampas and US Midwest, regions of similar potential input and output mixes. The focus is on 1910-1914, during the international grain trade boom and when census data are available. The Midwest was characterized by small farms and family labor. Land was a commercial asset and traded routinely. The Pampas was characterized by large landholdings and use of external labor. Land was a source of status and held across generations. Status attributes could not be easily monetized for trade, reducing market exchange, limiting entry, and hindering farm restructuring. Differing land property rights followed from English and Spanish colonial and post-independence policies. Geo-climatic factors cannot explain dissimilarities in farm sizes, tenancy, and output mixes, suggesting institutional constraints. Midwest farmers also were more responsive to exogenous signals. There is evidence of moral hazard on Pampas farms. Conjectures on long-term development are provided.
During the late 1930s, the Home Owners Loan Corporation (HOLC) created a series of maps designed to summarize spatial variation in the riskiness of mortgage lending in different neighborhoods. The HOLC maps, in conjunction with contemporaneous maps produced by the Federal Housing Agency (FHA), are at the center of debates regarding the long-run impacts of government-imposed redlining, particularly because black households were concentrated in the highest risk zones on these maps. This concentration, combined with the fact that these formerly redlined neighborhoods largely remain economically distressed today, suggest racial bias in the construction of the maps has had important effects over the long run. Using newly digitized data for ten major northern cities, Fishback, LaVoice, Shertzer, and Walsh assess the maps for the importance of this channel in explaining the prevalence of black residents in redlined neighborhoods. The researchers find that racial bias in the construction of the HOLC maps can explain at most a small fraction of the observed concentration of black households in redlined zones. Instead, their results suggest that the majority of black households were redlined because decades of disadvantage and discrimination had already pushed them in to the core of economically distressed neighborhoods prior to the government's direct involvement in mortgage markets. As a result, the HOLC maps are best viewed as providing clear evidence of how decades of unequal treatment effectively limited where black households lived in the 1930s rather than reflecting racial bias in the construction of the maps themselves. Fishback, LaVoice, Shertzer, and Walsh argue that the systemized treatment of neighborhood risk vis-à-vis mortgage lending that was adopted by HOLC and the FHA may have played a central role in locking these patterns of inequality in place.
Heldring, Robinson, and Vollmer use a dataset of the entire population of English Parliamentary enclosure acts between 1750 and 1830 to provide the first causal evidence of their impact. Exploiting a feature of the Parliamentary process that produced such legislation as a source of exogenous variation, the researchers show that enclosures were associated with significantly higher crop yields, a lower proportion of the population in agriculture, but also significantly lower population density and higher land inequality. Heldring, Robinson, and Vollmer's results are in line with a literature going back to Karl Marx on the effects of enclosure on structural change and inequality. They do not support the argument that informal systems of governance or “private orderings”, even in small, cohesive and stable communities, were able to efficiently allocate commonly used and governed resources. Parliamentary intervention was necessary.