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Title: How the Legacy of Slavery Survives: Labor Market Institutions and Demand for Human Capital
Citation Type: Miscellaneous
Publication Year: 2019
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Abstract: This research examines the impact of slavery on long-run development and its detailed mechanism which consists of two key components: labor market institutions and human capital investment. Using county-level data from the US South and exploiting exogenous variation in agro-climatic conditions, I show that slavery has impeded long-run economic development through the human capital channel. The proposed mechanism is explained in two steps. First, I argue that the local prevalence of slavery reduced return to human capital in the long-run. Through estimating the relative return to education for each county in 1940, I show that blacks in a region with greater dependence on slavery experienced more difficulty in converting their human capital into earnings. Second, to account for the effects on human capital structure, I suggest an institutional channel in the local labor market. I find from the census data that counties with greater dependence on slavery experienced less integration of black workers into the labor market after the abolition of slavery. Moreover, border-county analyses suggest that geographical variation in the labor market integration resulted from selective application of laws and regulations. In consequence, black workers in those regions were more likely to be locked in low-skill occupations, conditional on their human capital. In addition, I suggest that racial wage discrimination and selective migration played a role in the persistence of the mechanism.
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Authors: Jung, Yeonha
Publisher: Boston University
Data Collections: IPUMS USA - Ancestry Full Count Data
Topics: Housing and Segregation, Labor Force and Occupational Structure, Other, Race and Ethnicity
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