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What Doesn't Kill You Makes You Stronger? The Impact of the 1918 Spanish Flu Epidemic on Economic Performance in Sweden

Author

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  • Karlsson, Martin

    (Technische Universität Darmstadt)

  • Nilsson, Therese

    (Research Institute of Industrial Economics (IFN))

  • Pichler, Stefan

    (Technische Universität Darmstadt)

Abstract

We study the impact of the 1918 influenza pandemic on economic performance in Sweden. The pandemic was one of the severest and deadliest pandemics in human history, but it has hitherto received only scant attention in the economic literature – despite important implications for modern-day pandemics. In this paper, we exploit seemingly exogenous variation in incidence rates between Swedish regions to estimate the impact of the pandemic. Using difference in-differences and high-quality administrative data from Sweden, we estimate the effects on earnings, capital returns and poverty. We find that the pandemic led to a significant increase in poverty rates. There is also relatively strong evidence that capital returns were negatively affected by the pandemic. On the other hand, we find robust evidence that the influenza had no discernible effect on earnings. This finding is surprising since it goes against most previous empirical studies as well as theoretical predictions.

Suggested Citation

  • Karlsson, Martin & Nilsson, Therese & Pichler, Stefan, 2012. "What Doesn't Kill You Makes You Stronger? The Impact of the 1918 Spanish Flu Epidemic on Economic Performance in Sweden," Working Paper Series 911, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0911
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    Cited by:

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    2. Chen, Zhuo & Li, Pengfei & Liao, Li & Liu, Lu & Wang, Zhengwei, 2024. "Assessing and addressing the coronavirus-induced economic crisis: Evidence from 1.5 billion sales invoices," China Economic Review, Elsevier, vol. 85(C).
    3. Richter, André & Robling, Per Olof, 2013. "Multigenerational e ffects of the 1918-19 influenza pandemic in Sweden," Working Paper Series 5/2013, Stockholm University, Swedish Institute for Social Research.
    4. Rahmiye Figen Ceylan & Burhan Ozkan & Esra Mulazimogullari, 2020. "Historical evidence for economic effects of COVID-19," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(6), pages 817-823, August.

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    More about this item

    Keywords

    Spanish Flu; Difference-in-Differences;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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