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Persistent Antimarket Culture: A Legacy of the Pale of Settlement after the Holocaust

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  • Irena Grosfeld
  • Alexander Rodnyansky
  • Ekaterina Zhuravskaya

Abstract

We estimate long-term effects of Jewish presence in Europe before World War II, using discontinuity at the border of the "Pale of Settlement" area where Jews were allowed to live in the Russian Empire. Current residents of the Pale have lower support for market, and are less entrepreneurial but more trusting compared to those outside the Pale. We suggest a mechanism and test for it: anti-Semitism generated persistent antimarket culture and trust among non-Jews. Consistent with this mechanism, antimarket attitudes and trust decrease with distance to pogroms controlling for historical Jewish presence. Self-identification and cohesion of majority depends on the presence of minority.

Suggested Citation

  • Irena Grosfeld & Alexander Rodnyansky & Ekaterina Zhuravskaya, 2013. "Persistent Antimarket Culture: A Legacy of the Pale of Settlement after the Holocaust," American Economic Journal: Economic Policy, American Economic Association, vol. 5(3), pages 189-226, August.
  • Handle: RePEc:aea:aejpol:v:5:y:2013:i:3:p:189-226
    Note: DOI: 10.1257/pol.5.3.189
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    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
    • P10 - Economic Systems - - Capitalist Systems - - - General
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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