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In this article, we describe the use of ivmediate, a new command to estimate causal mediation effects in instrumental-variables settings using the framework developed by Dippel et al. (2020, unpublished manuscript). ivmediate allows estimation of a treatment effect and the share of this effect that can be attributed to a mediator variable. While both treatment and mediator can be potentially endogenous, a single instrument suffices to identify both the causal treatment and the mediation effects.

This paper examines the individual and aggregate costs of ethnic discrimination. Studying Germans in the U.S. during World War I, an event that abruptly downgraded their previously high social standing, we show that anti-German sentiment was strongly associated with counties' casualties in the war, leading to subsequent outmigration of Germans. Such relocation to evade discrimination was costly for German workers. However, counties with larger outflows of Germans, who tended to be well-trained manufacturing workers, incurred economic costs too, including a drop in average annual manufacturing wages of 0.6 to 2.2 percent. This effect lasted at least until 1930.

as well as seminar participants at Free University Berlin, Southern Denmark, and Pittsburgh for helpful discussions and comments. This paper was written as part of Ferrara's PhD thesis which received valuable feedback from his advisers, seminar participants at the University of Warwick, as well as the thesis examiners Bishnupriya Gupta and Taylor Jaworski. We also thank Mike Matheis who kindly shared his manufacturing data with us.