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What doesn’t kill you makes you stronger? The Impact of the 1918 Spanish Flu Epidemic on Economic Performance in Sweden

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  • Karlsson, Martin
  • Nilsson, Therese
  • Pichler, Stefan

Abstract

We study the impact of the 1918 influenza pandemic on economic performance in Sweden. The pandemic was one of the severest and deadliest pandemics in human history, but it has hitherto received only scant attention in the economic literature – despite important implications for modern-day pandemics. In this paper, we exploit seemingly exogenous variation in incidence rates between Swedish regions to estimate the impact of the pandemic. Using difference-in-differences and high-quality administrative data from Sweden, we estimate the effects on earnings, capital returns and poverty. We find that the pandemic led to a significant increase in poverty rates. There is also relatively strong evidence that capital returns were negatively affected by the pandemic. On the other hand, we find robust evidence that the influenza had no discernible effect on earnings. This finding is surprising since it goes against most previous empirical studies as well as theoretical predictions.

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Paper provided by Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL) in its series Darmstadt Discussion Papers in Economics with number 57149.

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Date of creation: 16 Mar 2012
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Publication status: Published in Darmstadt Discussion Papers in Economics . 211 (2012-03-16)
Handle: RePEc:dar:ddpeco:57149

Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/57149/
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Keywords: Spanish Flu; Difference-in-Differences;

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Cited by:
  1. Richter, André & Robling, Per Olof, 2013. "Multigenerational e ffects of the 1918-19 influenza pandemic in Sweden," Working Paper Series 5/2013, Swedish Institute for Social Research.

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