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Persistent anti-market culture: A legacy of the Pale of Settlement and of the Holocaust

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Author Info

  • Irena Grosfeld

    (Paris School of Economics and CNRS)

  • Alexander Rodnyansky

    (CEFIR)

  • Ekaterina Zhuravskaya

    ()
    (Paris School of Economics (EHESS) and New Economic School)

Abstract

We investigate the long-term effects of the important presence of Jews in Eastern Europe before the Second World War and their disappearance during the Holocaust. The Pale of Settlement, the area which Jewish residents were confined to in the Russian Empire, is used as a source of exogenous variation in the size of the Jewish population before the Second World War. Based on election and survey data, we find that current residents of the Pale, compared to their counterparts outside the Pale, vote more for socialist anti-market parties, have lower support for market economy and democracy, are less engaged in entrepreneurship, but exhibit higher levels of trust. At the same time, the Pale has no lasting effects on average consumption, income, and education levels. Regression discontinuity at the Pale border helps identification. We show that the effect of the Pale is related to the former presence of Jews rather than the inflow of new migrant population into the formerly-Jewish areas. We suggest a possible mechanism and present evidence consistent with it: non-Jewish population, at the time when two groups lived together side-by-side, developed persistent anti-market culture and bonding trust, rooted in ethnic hatred towards Jews. We show that, consistent with the mechanism, current residents of towns closer to places of pogroms exhibit higher trust and anti-market attitudes even controlling for the historical share of Jews in the population and the Pale.

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Bibliographic Info

Paper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0145.

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Length: 76 pages
Date of creation: Mar 2011
Date of revision:
Handle: RePEc:cfr:cefirw:w0145

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Keywords: Pale of Settlement; Holocaust; persistent culture; anti-market; bonding trust; pogroms;

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References

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  1. Daron Acemoglu & Tarek A. Hassan & James A. Robinson, 2010. "Social Structure and Development: A Legacy of the Holocaust in Russia," NBER Working Papers 16083, National Bureau of Economic Research, Inc.
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Cited by:
  1. Mathieu Couttenier & Marc Sangnier, 2010. "Living in the garden of Eden: Mineral resources foster individualism," PSE Working Papers halshs-00564920, HAL.
  2. Mevlude Akbulut Yuksel & Mutlu Yuksel, 2013. "The Long-Term Direct and External Effects of Jewish Expulsions in Nazi Germany," HiCN Working Papers 154, Households in Conflict Network.
  3. Grosfeld, Irena & Zhuravskaya, Ekaterina, 2013. "Persistent effects of empires: Evidence from the partitions of Poland," CEPREMAP Working Papers (Docweb) 1311, CEPREMAP.
  4. Voigtländer, Nico & Voth, Hans-Joachim, 2012. "(Re-) Shaping Hatred: Anti-Semitic Attitudes in Germany, 1890-2006," CEPR Discussion Papers 8935, C.E.P.R. Discussion Papers.

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