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Missing Men: World War II Casualties and Structural Change

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  • Christoph Eder

Abstract

This paper investigates the long-term consequences of violent conflict and the associatedhuman casualties on economic development. Using the World War II casualties suffered in Austrian municipalities as a natural experiment, I find a significant negative causal effect of human losses on economic activity, as measured by the current total wage bill in the affected communities today. The underlying determinants of this reduction in output are traced back to a lower number and density of firms, along with a smaller work force. However, this is only true for the service sector and not the manufacturing sector. As I demonstrate, the likely channel through which the effect persisted over time is through its impact on the structural composition of the work force. Specifically, greater human losses increased the fraction of employment in manufacturing at the expense of agriculture until the 1970s and services from then onwards. A simple model shows that structural change can translate a lower labor share in agricultural production into less participation of service sector growth at a later time.

Suggested Citation

  • Christoph Eder, 2014. "Missing Men: World War II Casualties and Structural Change," NRN working papers 2014-03, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  • Handle: RePEc:jku:nrnwps:2014_03
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    References listed on IDEAS

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    Cited by:

    1. christoph Eder & Martin Halla, 2016. "The Long-lasting Shadow of the Allied Occupation of Austria on its Spatial Equilibrium," HiCN Working Papers 230, Households in Conflict Network.
    2. Gay, Victor & Boehnke, Jörn, 2017. "The Missing Men: World War I and Female Labor Participation," MPRA Paper 77560, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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