The distributional effect of a financial crisis: Russia 1899–1905

Abstract

Who pays for financial crises? This paper examines the period between the major Russian financial crisis of 1899-1902 and the Russian Revolution of 1905. Using newly-constructed aggregate-level data and narrative evidence, this paper finds that in response to the crisis, the Russian government and industry transferred income and wealth from ordinary workers to industrialists and investors. The recipients of transfers weathered the crisis well and profited during the recovery, while employees' wages and wealth fell behind. The evidence also suggests that businesses required their staff to work more intensively.