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Title: Slavery and Evolution of the Local Economy: Labor Market Institutions and Return to Human Capital
Citation Type: Miscellaneous
Publication Year: 2019
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Abstract: This research examines the long-run relationship between slavery and the local economy in the US South. Exploiting climate-based variations in crop production, I show that where slavery was more prevalent, freed blacks began to accumulate human capital at a slower rate. I propose a mechanism in three steps. First, the local prevalence of slavery reduced the return to human capital. Evidence from the 1940 census data suggests that blacks in a region with a greater slave-to-population ratio in 1860 experienced more difficulty in converting their human capital into earnings. Second, as a channel for the reduction in the return to human capital, I argue that counties with greater dependence on slavery experienced slower integration of black workers into the post-slavery labor market. Black workers in those regions were more likely to be locked in low-skill occupations, even conditional on their human capital. Third, the labor market integration was hindered through the selective application of laws and regulations. Border-county analyses indicate that labor market laws separated black workers more effectively in proportion to the previous extent of slavery.
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Authors: Jung, Yeonha
Publisher: Korea Development Institute
Data Collections: IPUMS USA
Topics: Crime and Deviance, Labor Force and Occupational Structure, Other, Race and Ethnicity
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