Slavery, Education, and Inequality

We investigate the impact of slavery on the current performances of the US economy. Over a cross section of counties, we find that the legacy of slavery does not affect current income per capita, but does affect current income inequality. In other words, those counties that displayed a higher proportion of slaves are currently not poorer, but more unequal. Moreover, we find that the impact of slavery on current income inequality is determined by racial inequality. We test three alternative channels of transmission between slavery and inequality: a land inequality theory, a racial discrimination theory and a human capital theory. We find support for the third theory, i. e., even after controlling for potential endogeneity, current inequality is primarily influenced by slavery through the unequal educational attainment of blacks and whites. To improve our understanding of the dynamics of racial inequality along the educational dimension, we complete our investigation by analyzing a panel dataset covering the 1940-2000 period at the state level. Consistently with our previous findings, we find that the educational racial gap significantly depends on the initial gap, which was indeed larger in the former slave states.

[1]  Derek A. Neal.  Chapter 9 Why Has Black–White Skill Convergence Stopped? , 2006 .

[2]  K. Sokoloff,et al.  NBER WORKING PAPER SERIES INSTITUTIONAL AND NON-INSTITUTIONAL EXPLANATIONS OF ECONOMIC DIFFERENCES , 2003 .

[3]  Graziella Bertocchi,et al.  The Evolution of the Racial Gap in Education and the Legacy of Slavery , 2011, SSRN Electronic Journal.

[4]  R. Ransom,et al.  One Kind of Freedom: The Economic Consequences of Emancipation , 1979 .

[5]  P. David,et al.  Reckoning With Slavery , 1976 .

[6]  James J. Heckman,et al.  The Dynamics of Educational Attainment for Black, Hispanic, and White Males , 2001, Journal of Political Economy.

[7]  M. Reich,et al.  Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties , 2007, The Review of Economics and Statistics.

[8]  R. Margo,et al.  Historical Perspectives on Racial Differences in Schooling in the United States , 2003 .

[9]  V. Key,et al.  Politics, parties, and pressure groups , 1948 .

[10]  Kenneth L. Sokoloff,et al.  Factor Endowments: Institutions, and Differential Paths of Growth Among New World Economies: A View from Economic Historians of the United States , 1994 .

[11]  Gavin J. Wright,et al.  Slavery and American Economic Development , 2006 .

[12]  Kenneth L. Sokoloff,et al.  The Evolution of Suffrage Institutions in the New World , 2001, The Journal of Economic History.

[13]  F. Caselli,et al.  The U.S. Structural Transformation and Regional Convergence: A Reinterpretation , 2001, Journal of Political Economy.

[14]  Jeffrey D. Sachs,et al.  The United States as a Coastal Nation , 2003 .

[15]  Nathan Nunn.  Slavery, Inequality, and Economic Development in the Americas: , 2007, Institutions and Economic Performance.

[16]  Kenneth L. Sokoloff,et al.  Inequality and the Evolution of Institutions of Taxation: Evidence from the Economic History of the Americas , 2007 .

[17]  Finis Welch,et al.  Black Economic Progress after Myrdal , 1989 .

[18]  K. Carstensen,et al.  The primacy of institutions reconsidered: Direct income effects of malaria prevalence , 2006 .

[19]  Rodney Ramcharan.  Inequality and Redistribution: Evidence from U.S. Counties and States, 18901930 , 2009, The Review of Economics and Statistics.

[20]  W. Summerhill.  Colonial Institutions, Slavery, Inequality, and Development: Evidence from São Paulo, Brazil , 2010 .

[21]  J. Heckman,et al.  Continuous Versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks , 1991 .

[22]  James P. Smith.  Race and Human Capital , 1984 .

[23]  R. Gerber.  Time on the Cross: The Economics of American Negro Slavery , 1974 .

[24]  R. Margo.  Race and Schooling in the South: A Review of the Evidence , 1990 .

[25]  J. Heckman.  The Central Role of the South in Accounting for the Economic Progress of Black Americans , 1990 .

[26]  C. I. Jones,et al.  Why Do Some Countries Produce so Much More Output Per Worker than Others? , 1998 .

[27]  William H. Flanigan,et al.  Electoral data for counties in the United States: Presidential and congressional races , 1986 .

[28]  Stanley L. Engerman,et al.  History Lessons Institutions, Factor Endowments, and Paths of Development in the New World , 2000 .

[29]  N. Lagerlöf.  Slavery and other property rights , 2003 .

[30]  David L. Smith,et al.  Modelling the global constraints of temperature on transmission of Plasmodium falciparum and P. vivax , 2011, Parasites & Vectors.

[31]  John Shea,et al.  Instrument Relevance in Multivariate Linear Models: A Simple Measure , 1996, Review of Economics and Statistics.

[32]  Oded Galor,et al.  Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions and the Great Divergence , 2008, The Review of economic studies.

[33]  S. Engerman,et al.  Time on the Cross , 1974 .

[34]  David Hursh.  Exacerbating inequality: the failed promise of the No Child Left Behind Act , 2007 .

[35]  Race and Schooling in the South, 1880-1950: An Economic History , 1990 .

[36]  James A. Robinson,et al.  Economic and Political Inequality in Development: The Case of Cundinamarca, Colombia , 2007 .

[37]  J. L. Londoño,et al.  Asset Inequality Matters: An Assessment of the World Bank's Approach to Poverty Reduction. , 1997 .

[38]  W. Sundstrom.  The Geography of Wage Discrimination in the Pre-Civil Rights South , 2007 .

[39]  S. Engerman,et al.  Time on the cross : the economics of American Negro slavery , 1974 .

[40]  I. Berlin.  Generations of Captivity: A History of African-American Slaves , 2003 .

[41]  S. Naidu.  Suffrage, Schooling, and Sorting in the Post-Bellum U.S. South , 2012 .

[42]  Graziella Bertocchi,et al.  De jure and de facto determinants of power: evidence from Mississippi , 2012, Constitutional Political Economy.

[43]  Orley Ashenfelter,et al.  Measuring the Effect of an Anti-Discrimination Program , 1974 .

[44]  J. Irwin.  Explaining the Decline in Southern per Capita Output after Emancipation , 1994 .

[45]  R. Mickelson.  Race, Ethnicity, and Education , 2009 .

[46]  R. Margo,et al.  Chapter 3 Historical Perspectives on Racial Differences in Schooling in the United States , 2006 .

[47]  Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties , 2007 .

[48]  D. Acemoglu,et al.  The Economics of Labor Coercion , 2009 .

[49]  James A. Robinson,et al.  Persistence of Power, Elites, and Institutions , 2006 .

[50]  Graziella Bertocchi,et al.  Race V. Suffrage: The Determinants of Development in Mississippi , 2011, SSRN Electronic Journal.

[51]  E. Morgan,et al.  Idleness Ethic and the Liberty of Anglo-Americans@@@American Slavery--American Freedom: The Ordeal of Colonial Virginia. , 1975 .

[52]  Nathan Nunn,et al.  The Long-Term Effects of Africa's Slave Trades , 2008 .

[53]  Kaivan Munshi,et al.  Black Networks After Emancipation : Evidence from Reconstruction and the Great Migration ∗ , 2012 .

[54]  G. Marotta,et al.  A Less Effective Monetary Transmission in the Wake of Emu? Evidence from Lending Rates Pass-Through , 2005 .

[55]  S. Engerman,et al.  Time on the Cross: The Economics of American Negro Slavery.@@@Time on the Cross: Evidence and Methods. , 1975 .

[56]  Claudia Goldin,et al.  The Great Compression: The Wage Structure in the United States at Mid- Century , 1991 .

[57]  David Card,et al.  School Quality and Black-White Relative Earnings: A Direct Assessment , 1991 .

[58]  Daron Acemoglu,et al.  Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution , 2001 .

[59]  K. Mitchener,et al.  The Productivity of U.S. States Since 1880 , 2003 .

[60]  C. Goldin.  America's Graduation from High School: The Evolution and Spread of Secondary Schooling in the Twentieth Century , 1998, The Journal of Economic History.

[61]  K. Mitchener,et al.  The Productivity of US States since 1880 , 2003 .

[62]  James A. Robinson,et al.  Income and Democracy? , 2005 .

[63]  D. Rubin,et al.  The central role of the propensity score in observational studies for causal effects , 1983 .

[64]  Gustavo J. Bobonis,et al.  Export Commodity Booms, Labor Coercion, and the Historical Containment of Education * , 2010 .

[65]  R. Einhorn.  Patrick Henry's Case against the Constitution: The Structural Problem with Slavery , 2002 .

[66]  Jeffrey D. Sachs,et al.  The curse of natural resources , 2001 .

[67]  R. Margo.  Race and Schooling in the South, 1880-1950 , 1992 .

[68]  C. Fohlen.  Reckoning with slavery. A critical study in the quantitative history of American Negro slavery , 1978 .

[69]  Lawrence F. Katz,et al.  The Shaping of Higher Education: The Formative Years in the United States, 1890 to 1940 , 1998 .

[70]  Louis Putterman,et al.  Post-1500 Population Flows and the Long Run Determinants of Economic Growth and Inequality , 2008, The quarterly journal of economics.

[71]  D. Neal,et al.  Why Has Black-White Skill Convergence Stopped? , 2005 .