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The distributional consequences of trade: Evidence from the Grain Invasion

Author

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  • Stephan Heblich
  • Stephen J. Redding
  • Yanos Zylberberg

Abstract

We examine the distributional consequences of trade using the New World Grain Invasion that occurred in the second half of the 19th century. We use a newly-created dataset on population, employment by sector, property values, and poor law transfers for over 10,000 parishes in England and Wales from 1801-1901. In response to this trade shock, we show that locations with high wheat suitability experience population decline, rural-urban migration, structural transformation away from agriculture, increases in welfare transfers, and declines in property values, relative to locations with low wheat suitability. We develop a quantitative spatial model to evaluate the income distributional consequences of this trade shock. Undertaking counterfactuals for the Grain Invasion, we show that geography is an important dimension along which these income distributional consequences occur.

Suggested Citation

  • Stephan Heblich & Stephen J. Redding & Yanos Zylberberg, 2024. "The distributional consequences of trade: Evidence from the Grain Invasion," CEP Discussion Papers dp2033, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp2033
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    Keywords

    international trade; income distribution; geography;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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