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Testing Marx. Inequality, Concentration, and Political Polarization in Late 19th Century Germany, with Charlotte Bartels and Nikolaus Wolf.

Review of Economics and Statistics Forthcoming.

[PDF Open Access][Replication Files][VoxEU Column][Berlin School of Economics Insights]

Abstract: We study the dynamics of capital accumulation, income inequality, capital concentration, and voting up to 1914. Based on new panel data for Prussian regions, we re-evaluate the famous Revisionism Debate between orthodox Marxists and their critics. We show that changes in capital accumulation led to a rise in the capital share and income inequality, as predicted by orthodox Marxists. But against their predictions, this did neither lead to further capital concentration nor to more votes for the socialists. Instead, trade unions and strike activity limited income inequality and fostered political support for socialism, as argued by the Revisionists.

On the Origins of National Identity. German Nation-Building after Napoleon, with Nikolaus Wolf.

Journal of Comparative Economics 52(2), 463-477, 2024.

[PDF Open access][Replication Files][Online Appendix][VoxEU Column]

Abstract: How did political elites shape national identities? In this paper, we investigate the success of nation-building policies in early 19th century Germany. To elicit changes in identity at the level of individuals we use data on first names given in over 40.000 families in German cities. Using changes in the Prussian territory as well as variation within the same families over time, we find that parents in cities treated by nation-building policies responded by choosing national (rather than Prussian) first names for their children.                        

Trade Shocks, Labour Markets and Migration in the First Globalisation, with Richard Bräuer.

The Economic Journal 134(657), 135-164, 2024. 

[PDF Open Access][Replication Files][Online Appendix]

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 globalization. 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 polarization, which we relate to 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 globalization, but depend on labor mobility. For our analysis, we digitize data from Prussian industrial and agricultural censuses on the county level and combine it with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian and US trade data to isolate exogenous variation.

Weber Revisited: The Protestant Ethic and the Spirit of Nationalism, with Iris Wohnsiedler and Nikolaus Wolf.

Journal of Economic History 80(3), 710-745, 2020.

[PDF Open Access][Replication Files][Online Appendix][VoxEU Column][Ökonomenstimme Column][FAZ Article in German]

Abstract: We revisit Max Weber's hypothesis on the role of Protestantism for economic development. We show that nationalism is crucial to both, the interpretation of Weber’s Protestant Ethic and empirical tests thereof. For late nineteenth-century century Prussia we reject Weber’s suggestion that Protestantism mattered due to an “ascetic compulsion to save”. Moreover, we find that income levels, savings, and literacy rates differed between Germans and Poles, not between Protestants and Catholics, using pooled OLS and IV regressions. We suggest that this result is due to anti-Polish discrimination.

Industrialization, Returns, Inequality, with Thilo N. H. Albers and Timo Stieglitz.

[CRC DP No. 462, 2023]

Abstract: How does revolutionary technological change impact wealth inequality? We turn to the mother of all technological shocks±the Industrial Revolution and analyze its role for wealth concentration both empirically and theoretically. Based on a novel dataset on wealth shares at the level of Prussian counties, we provide causal evidence on the positive effect of industrialization on the top percentile’s wealth share and the inequality among top fortunes. We show that this relationship between industrialization, wealth concentration, and tail fattening is consistent with both cross-country data on national wealth distributions and with a new individual-level dataset of Prussian millionaires. We disentangle the mechanisms underlying the observed wealth concentration and tail fattening by introducing a dynamic two-sector structure into an overlapping generations model with heterogeneous returns to capital. In particular, we study the role of sector-specific scale dependence, i.e., the positive correlation of rates of return and wealth in industry, and dynastic type dependence in returns, i.e., the gradual one-directional transition of wealth-holders from the low-return traditional to the high-return industrial sector. The simulations suggest that the combination of these two features explains about half of the total increase of the top-1% share, while the other half resulted from the general increase and higher dispersion of returns induced by the emerging industrial sector.

Mimicking the Opposition: Bismarck's Welfare State and the Rise of the Socialists. 

[CRC DP No. 448, 2023]

Abstract: This paper examines the consequences of a government mimicking the policy of its competitor by studying the introduction of the welfare state in 19th century Germany. The reform conducted by the conservative government targeted blue-collar workers and aimed to reduce the success of the socialist party. The result based on a difference-in-differences design shows that the socialist party benefited in elections due to the reform. The analysis of the mechanism points to the socialist’s issue ownership by strengthening its reform orientation, which voters followed. The results are not driven by other political and economic channels related to the reform.

Income Misperception and Populism, with Thilo N. H. Albers and Fabian Kosse.

[CRC DP No. 344, 2022]

Abstract: We propose that false beliefs about the own current economic status are an important factor for explaining populist attitudes. Along with the subjects’ receptiveness to right-wing populism, we elicit their perceived relative income positions in a representative survey of German households. We find that people with pessimistic beliefs about their income position are more attuned to populist statements. Key to understanding the misperception-populism relationship are strong gender differences in the mechanism: Misperception triggers income dissatisfaction for both men and women, but the former are much more likely to channel their discontent into affection for populist ideas.

The Political Economy of Social Identity in 19th Century Germany, European Review of Economic History, 27(4), 635-637, 2023 [summary of my dissertation].

National identity, economic integration, and the rise of Prussia, with Nikolaus Wolf, In: Ulrich Pfister and Nikolaus Wolf (eds.). An Economic History of the First German Unification. Routledge, 19-37, 2023.

German version: Nationale Identität, ökonomische Integration und der Aufstieg Preusses, with Nikolaus Wolf, In: Ulrich Pfister et al. (eds.). Deutschland 1871. Die Nationalstaatsbildung und der Weg in die Moderne Wirtschaft. Mohr Siebeck, 23-47, 2021.

Review "Capital and Ideology" by Thomas Piketty, with Till Breyer, Critical Inquiry 47(3), 613-615, 2021.

German version: Theorieblog.

Review "Enacting Dismal Science. New Perspectives on the Performativity of Economics" by Ivan Boldyrev and Ekaterina Svetlova (eds.), with Anja Breljak, Journal of Economic Methodology 24(4), 434-440, 2017.