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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.

Suggested Citation

  • Karlsson, Martin & Nilsson, Therese & Pichler, Stefan, 2012. "What doesn’t kill you makes you stronger? The Impact of the 1918 Spanish Flu Epidemic on Economic Performance in Sweden," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 77375, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:77375
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/77375/
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    Cited by:

    1. Sebastian Vollmer & Juditha Wójcik, 2017. "The long-term consequences of the global 1918 influenza pandemic: A systematic analysis of 117 IPUMS international census data sets," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 242, Courant Research Centre PEG.
    2. Richter, André & Robling, Per Olof, 2013. "Multigenerational e ffects of the 1918-19 influenza pandemic in Sweden," Working Paper Series 5/2013, Stockholm University, Swedish Institute for Social Research.
    3. Rahmiye Figen Ceylan & Burhan Ozkan & Esra Mulazimogullari, 2020. "Historical evidence for economic effects of COVID-19," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(6), pages 817-823, August.

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    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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