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Self-reinforcing shocks: evidence from a resettlement policy

  • Aki Kangasharju
  • Matti Sarvimäki

We examine the long-term effects of resettling 11 percent of the Finnish population from areas ceded to the Soviet Union during World War II. Our empirical strategy exploits features of the resettlement policy as a source of plausibly exogenous variation in population growth. The results suggest that a 10 percent increase in the population of a rural location during the war caused an additional 15 percent growth during the next five decades. The growth was driven by migration and led to the expansion of the non-primary sector. The effect is larger for locations connected to the railway network.

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File URL: http://eprints.lse.ac.uk/33512/
File Function: Open access version.
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Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 33512.

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Length: 40 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:ehl:lserod:33512
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