IDEAS home Printed from https://ideas.repec.org/a/oup/econjl/v134y2023i657p135-164..html
   My bibliography  Save this article

Trade Shocks, Labour Markets and Migration in the First Globalisation

Author

Listed:
  • Richard Bräuer
  • Felix Kersting

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 globalisation (1870–913). We show that this shock led to a decline in the employment rate and overall income. However, we do not observe declining per capita income and political polarisation, which we explain by a strong migration response. Our results suggest that the negative and persistent effects of trade shocks we see today are not a universal feature of globalisation, but depend on labour mobility. For our analysis, we digitise data from Prussian industrial and agricultural censuses on the county level and combine them with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian and United States trade data to isolate exogenous variation.

Suggested Citation

  • Richard Bräuer & Felix Kersting, 2023. "Trade Shocks, Labour Markets and Migration in the First Globalisation," The Economic Journal, Royal Economic Society, vol. 134(657), pages 135-164.
    • Handle: RePEc:oup:econjl:v:134:y:2023:i:657:p:135-164.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/ej/uead068
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    2. Wolf-Fabian Hungerland & Christoph Altmeppen, 2021. "What is a product anyway? Applying the Standard International Trade Classification (SITC) to historical data," Historical Methods: A Journal of Quantitative and Interdisciplinary History, Taylor & Francis Journals, vol. 54(2), pages 65-79, April.
    3. Pablo Fajgelbaum & Stephen J. Redding, 2022. "Trade, Structural Transformation, and Development: Evidence from Argentina 1869–1914," Journal of Political Economy, University of Chicago Press, vol. 130(5), pages 1249-1318.
    4. Tena-Junguito, Antonio & Lampe, Markus & Fernandes, Felipe Tâmega, 2012. "How Much Trade Liberalization Was There in the World Before and After Cobden-Chevalier?," The Journal of Economic History, Cambridge University Press, vol. 72(3), pages 708-740, August.
    5. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum, 2021. "Adjusting to Globalization in Germany," Journal of Labor Economics, University of Chicago Press, vol. 39(1), pages 263-302.
    6. Federico, Giovanni & Vasta, Michelangelo, 2015. "What Do We Really Know about Protection before the Great Depression: Evidence from Italy," The Journal of Economic History, Cambridge University Press, vol. 75(4), pages 993-1029, December.
    7. Paula Bustos & Bruno Caprettini & Jacopo Ponticelli, 2016. "Agricultural Productivity and Structural Transformation: Evidence from Brazil," American Economic Review, American Economic Association, vol. 106(6), pages 1320-1365, June.
    8. Lorenzo Caliendo & Maximiliano Dvorkin & Fernando Parro, 2019. "Trade and Labor Market Dynamics: General Equilibrium Analysis of the China Trade Shock," Econometrica, Econometric Society, vol. 87(3), pages 741-835, May.
    9. Sullivan, Paul, 2010. "Empirical evidence on occupation and industry specific human capital," Labour Economics, Elsevier, vol. 17(3), pages 567-580, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Miriam Fritzsche, 2024. "De-industrialization, local joblessness and the male-female employment gap," Berlin School of Economics Discussion Papers 0040, Berlin School of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bräuer, Richard & Hungerland, Wolf-Fabian & Kersting, Felix, 2021. "Trade shocks, labour markets and elections in the first globalisation," IWH-CompNet Discussion Papers 4/2021, Halle Institute for Economic Research (IWH).
    2. Rafael Dix-Carneiro & João Paulo Pessoa & Ricardo Reyes-Heroles & Sharon Traiberman, 2023. "Globalization, Trade Imbalances, and Labor Market Adjustment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(2), pages 1109-1171.
    3. Rafael Dix-Carneiro & Brian K. Kovak, 2017. "Trade Liberalization and Regional Dynamics," American Economic Review, American Economic Association, vol. 107(10), pages 2908-2946, October.
    4. Rodrigo Adão & Costas Arkolakis & Federico Esposito, 2019. "General Equilibrium Effects in Space: Theory and Measurement," NBER Working Papers 25544, National Bureau of Economic Research, Inc.
    5. David H. Autor & David Dorn & Gordon Hanson & Maggie R. Jones & Bradley Setzler, 2025. "Places versus People: The Ins and Outs of Labor Market Adjustment to Globalization," Opportunity and Inclusive Growth Institute Working Papers 112, Federal Reserve Bank of Minneapolis.
    6. Timo Walter, 2023. "German labor market reform and the rise of Eastern Europe: dissecting their effects on employment," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(2), pages 351-387, May.
    7. Eggenberger, Christian & Janssen, Simon & Backes-Gellner, Uschi, 2022. "The value of specific skills under shock: High risks and high returns," Labour Economics, Elsevier, vol. 78(C).
    8. Dorn, David & Levell, Peter, 2021. "Trade and Inequality in Europe and the US," CEPR Discussion Papers 16780, C.E.P.R. Discussion Papers.
    9. David Autor & David Dorn & Gordon Hanson & Maggie R. Jones & Bradley Setzler, 2024. "Places versus People: The Ins and Outs of Labor Market Adjustment to Globalization," Working Papers 24-78, Center for Economic Studies, U.S. Census Bureau.
    10. Shuhei Kainuma & Yukiko U. Saito, 2022. "China's impact on regional employment: Propagation through input–output linkages and co‐location patterns," The World Economy, Wiley Blackwell, vol. 45(11), pages 3559-3601, November.
    11. Boddin, Dominik & Kroeger, Thilo, 2021. "Structural change revisited: The rise of manufacturing jobs in the service sector," Discussion Papers 38/2021, Deutsche Bundesbank.
    12. Dorn, David & Levell, Peter, 2024. "Labour market impacts of the China shock: Why the tide of Globalisation did not lift all boats," Labour Economics, Elsevier, vol. 91(C).
    13. Rodrigo Ad'o & Costas Arkolakis & Federico Esp'sito, 2019. "Spatial Linkages, Global Shocks, and Local Labor Markets: Theory and Evidence," Cowles Foundation Discussion Papers 2163, Cowles Foundation for Research in Economics, Yale University.
    14. Pessoa, Joao Paulo & Costa, Francisco, 2020. "Winners and Losers from China's Ascension in International Trade: a Structural Approach," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 39(2), March.
    15. Andrés César & Guillermo Falcone, 2020. "Heterogeneous Effects of Chinese Import Competition on Chilean Manufacturing Plants," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 1-60, December.
    16. Keller, Wolfgang & Utar, Hale, 2023. "International trade and job polarization: Evidence at the worker level," Journal of International Economics, Elsevier, vol. 145(C).
    17. Enghin Atalay & Ali Hortacsu & Mustafa Runyun & Chad Syverson & Mehmet Fatih Ulu, 2023. "Micro- and Macroeconomic Impacts of a Place-Based Industrial Policy," Working Papers 23-12, Federal Reserve Bank of Philadelphia.
    18. Chiquiar, Daniel & Covarrubias, Enrique & Salcedo, Alejandrina, 2016. "Labor market consequences of trade openness and competition in foreign markets," Conference papers 332760, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    19. Tschopp, Jeanne, 2015. "The Wage Response to Shocks: The Role of Inter-Occupational Labour Adjustment," Labour Economics, Elsevier, vol. 37(C), pages 28-37.
    20. Paula Bustos & Juan Manuel Castro Vincenzi & Joan Monras & Jacopo Ponticelli, 2019. "Structural Transformation, Industrial Specialization, and Endogenous Growth," Working Papers wp2019_1906, CEMFI.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:econjl:v:134:y:2023:i:657:p:135-164.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/resssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.