Hostility, population sorting, and backwardness: quasi-experimental evidence from the Red Army after WWII

0578808 - NHU-C 2024 CZ eng V - Research Report
Ochsner, Christian
Hostility, population sorting, and backwardness: quasi-experimental evidence from the Red Army after WWII.
Prague: CERGE-EI, 2023. 48 s. CERGE-EI Working Paper Series, 768. ISSN 2788-0443
Grant - others:Univerzita Karlova(CZ) UNCE/HUM/035
Institutional support: Cooperatio-COOP
Keywords : conflict * hostility * population shock
OECD category: Applied Economics, Econometrics
https://www.cerge-ei.cz/pdf/wp/Wp768.pdf

Does a short episode of conflict or exposure to hostile troops cause regional economic backwardness, and if so, why and how does it persist? I answer these questions by exploiting economic differences across the idiosyncratic and short-lived line of contact between the Red Army and the Western Allies in South Austria at the end of WWII. Spatial regression discontinuity estimates show that hostile presence of the Red Army for 74 days caused an immediate relative population decline of around 12%, amplified to 25% by today. Age-specific migration patterns and subsequent fertility differences explain the multiplying effects. Sector development and measures of local labor productivity in 2011 also lag behind in regions briefly seized by the Red Army, likely driven by skill-specific migration and hampered investment patterns after WWII. The findings provide novel insights into the long-run effects of wars and conflicts, and point to the isolated role of the Red Army’s hostile actions after WWII to understand the European economic East-West divide.

Permanent Link: https://hdl.handle.net/11104/0347710