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Up from Poverty? The 1832 Cherokee Land Lottery and the Long-run Distribution of Wealth

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  • Hoyt Bleakley
  • Joseph P. Ferrie

Abstract

The state of Georgia allocated most of its land to the public through a system of lotteries. These episodes provide unusual opportunities to assess the long-term impact of large shocks to wealth, as winning was uncorrelated with individual characteristics and participation was nearly universal among the eligible population of adult white male Georgians. We use one of these episodes to examine the idea that the lower tail of the wealth distribution reflects in part a wealth-based poverty trap because of limited access to capital. Using wealth measured in the 1850 Census manuscripts, we follow up on a sample of men eligible to win in the 1832 Cherokee Land Lottery. We assess the impact of lottery winning on the distribution of wealth 18 years after the fact. Winners are on average richer (by an amount close to the median of 1850 wealth), but mainly due to a (net) shifting of mass from the middle to the upper tail of the wealth distribution. The lower tail is largely unaffected.

Suggested Citation

  • Hoyt Bleakley & Joseph P. Ferrie, 2013. "Up from Poverty? The 1832 Cherokee Land Lottery and the Long-run Distribution of Wealth," NBER Working Papers 19175, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19175 Note: DAE DEV LS
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    References listed on IDEAS

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    1. Francisco J. Buera & Yongseok Shin, 2013. "Financial Frictions and the Persistence of History: A Quantitative Exploration," Journal of Political Economy, University of Chicago Press, vol. 121(2), pages 221-272.
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    Cited by:

    1. Rossi, Martín A., 2014. "The impact of individual wealth on posterior political power," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 469-480.
    2. Hoyt Bleakley & Joseph Ferrie, 2016. "Shocking Behavior: Random Wealth in Antebellum Georgia and Human Capital Across Generations," The Quarterly Journal of Economics, Oxford University Press, vol. 131(3), pages 1455-1495.
    3. Martha Bailey & Connor Cole & Morgan Henderson & Catherine Massey, 2017. "How Well Do Automated Methods Perform in Historical Samples? Evidence from New Ground Truth," NBER Working Papers 24019, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • N31 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: Pre-1913
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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