The Intergenerational Effects of a Large Wealth Shock: White Southerners After the Civil War

Abstract

and the late Werner Troesken. James Feigenbaum, Matt Jaremski, and Suresh Naidu generously shared data with us for the project. Brian Lee provided excellent research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Capital Destruction and Economic Growth: The Effects of Sherman's March, 1850-1920

“…12 Related to our work, two recent papers study the effects of emancipation as a wealth shock and trace the effects on intergenerational mobility from the antebellum to postbellum South (Ager, Boustan, and Eriksson 2019;Dupont and Rosenbloom 2016). Ager, Boustan, and Eriksson (2019) argue that while emancipation reduced the wealth of the richest slaveholders in 1870, their sons recovered their wealth and occupational status by 1880.…”

“…Ager, Boustan, and Eriksson (2019) argue that while emancipation reduced the wealth of the richest slaveholders in 1870, their sons recovered their wealth and occupational status by 1880. Using the Sherman's March geographic data we collected for this paper, Ager, Boustan, and Eriksson (2019) also show that the negative effects on wealth in 1870 are significantly larger for wealthy household heads in Sherman's path compared to similar household heads in Georgia counties outside Sherman's path, with differences in wealth in 1870 as large as 40 log points.…”

“…One concern with this approach is that the Civil War may have been particularly costly for the wealthiest Southerners, making pre-war level of wealth in a county not informative about the presence of wealth after the march. However, recent work by Ager, Boustan, and Eriksson (2019) suggests that this is unlikely, with a finding that families who were very wealthy in the South before the war tended to still be high-wealth afterward, with little of the emancipation or war shock transmitted intergenerationally to the sons of the planter elite.…”

The 2019 crisis in Chile: fundamental change needed, not just technical fixes to the health system

“…Chile is not unique in this; elsewhere fundamental political and economic reforms have left existing power relationships largely intact. Notable examples include the transition from communism in Europe, where many of the previous leaders transformed overnight into "democrats" [58] and the rapid recovery of slave owning families in the Confederate states after the American civil war [59]. Acemoglu and Robinson developed an equilibrium model to explain this, in which they distinguish the "elite" from the "citizens".…”

The Dynamics of the Racial Wealth Gap

“…There is an empirical literature on related topics. In addition to those studies already cited, see alsoBleakley and Ferrie (2016),Sacerdote (2005),Collins and Wanamaker (2017), andAger et al (2019).6 In the Historical SCF constructed byKuhn et al (2018), the racial differences in the 1962 SCF are not outliers relative to nearby years. We discuss our argument for not using the Historical SCF below.…”