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The Legacy of King Cotton: Agricultural Patterns and the Quality of Structural Change

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  • Jung, Yeonha

Abstract

Agricultural patterns could have diverse impact on long-run economic development. In the context of the US South, this paper examines the legacy of cotton on economic development focusing on a novel channel of structural change. Exploiting variation in cotton production along with agro-climatic conditions, I show that the legacy of cotton has impeded local economic development exclusively as of the mid-twentieth century. The structural break is found to be a consequence of cotton mechanization. Evidence from exogenous variation in the boll weevil infestation shows that cotton farming was strongly dependent on tenant farmers with little human capital. Following cotton mechanization, cotton tenants were largely displaced and absorbed by the manufacturing sector. I then find that the inflow of cotton tenants has reduced labor productivity in the manufacturing sector. Beyond the composition effect, the negative impact on manufacturing productivity has persisted in the long-run through demand-side. Employing an index of state-level policy environment, I exploit within-state variation to show that the legacy of cotton has induced unskill-biased technical change in manufacturing.

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  • Jung, Yeonha, 2018. "The Legacy of King Cotton: Agricultural Patterns and the Quality of Structural Change," SocArXiv trjfz, Center for Open Science.
    • Handle: RePEc:osf:socarx:trjfz
    DOI: 10.31219/osf.io/trjfz
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