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Hostility, Population Sorting, and Backwardness: Quasi-Experimental Evidence from the Red Army after WWII

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  • Christian Ochsner

Abstract

Does a short episode of conflict or exposure to hostile troops cause regional economic backwardness, and if so, why and how does it persist? I answer these questions by exploiting economic differences across the idiosyncratic and short-lived line of contact between the Red Army and the Western Allies in South Austria at the end of WWII. Spatial regression discontinuity estimates show that hostile presence of the Red Army for 74 days caused an immediate relative population decline of around 12%, amplified to 25% by today. Age-specific migration patterns and subsequent fertility differences explain the multiplying effects. Sector development and measures of local labor productivity in 2011 also lag behind in regions briefly seized by the Red Army, likely driven by skill-specific migration and hampered investment patterns after WWII. The findings provide novel insights into the long-run effects of wars and conflicts, and point to the isolated role of the Red Army’s hostile actions after WWII to understand the European economic East-West divide.

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  • Christian Ochsner, 2023. "Hostility, Population Sorting, and Backwardness: Quasi-Experimental Evidence from the Red Army after WWII," CERGE-EI Working Papers wp768, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp768
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    More about this item

    Keywords

    Conflict; Hostility; Population shock; Regional development; Red Army;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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