Essays in historical development

This thesis brings new evidence to the debates around historical development by looking into the past of three countries. Most of the data are from Denmark, which today is a developed and prosperous country. The thesis analyzes her historical wages, regional GDP, the institution of serfdom, and border changes. In one chapter, the Danish data are combined with Data from Sweden. The thesis also turns its attention to a transition country, Romania, by exploiting that the Columbian Exchange led to the introduction of maize in the old world.

It contains five chapters, and it is mainly based on unique data on historical wages for Denmark and population for Romania. The data on wages come from the Danish Price History Project which spent 60 years in collecting these data. It is part of a bigger project proposed by Peter Sandholt Jensen and Paul Richard Sharp – my supervisors. The other data refers to 600 years of new population data for Romania.

The first chapter creates the data set on wage developments in Denmark based on data gathered by the Danish Price History Project for the period 1660‐1800. It contributes to the Little Divergence debate by constructing a long run real wage series for 1500‐1900. I find that Denmark had stagnating real wages during the 17th, 18th centuries and the middle of the 19th century, in contrast to England, which saw increases in wages during this period. The data reveal a skill premium which was more unstable and higher than that of leading countries in Europe, while the gender gap tended close towards the end of the 18th century. Further, a trend of income convergence can be observed at the regional level.

The second chapter is co‐authored with Kari Anne Janisse, Peter Sandholt Jensen and Paul Richard Sharp. It will be a part of the book named: “The Economic Development of Europe's Regions. A Quantitative History since 1900”. This chapter uses data from 1850 to the present and gives an overview of the regional economic activity for Denmark by presenting new estimates of income per capita and subregional convergence. It also aimed to explore the effects of decreasing transportation costs in the context of Danish growth. Our results imply that rather than rural Denmark experiencing poor growth, there is evidence of rural areas converging towards Copenhagen, especially in the high growth period up to 1970. On the other hand, there seems to be a distinct lack of advantages for firms and citizens to locate in these areas and evidence of divergence afterwards.

The third chapter is co‐authored with Peter Sandholt Jensen, Paul Richard Sharp and Battista Severgnini. This study contributes to the debate on whether historical restrictions on labor mobility matter for labor market outcomes. For this we consider the historical and economic situation in Denmark during the 18th century, which presents a number of advantages. First, while serfdom ended in the early sixteenth century in most of Western Europe, Denmark is an exception. After being established and then abolished for part of the country between the end of the 15th century and 1702, serfdom was reintroduced for the whole Kingdom in 1733 for all males in the age group 14 to 36 years. It was ostensibly aimed at ensuring a supply of men for the military, but it has been argued that it mainly aimed at ensuring farmhands for the estates. Secondly, we can exploit the micro‐level dataset presented in the first chapter, which contains information on wages, occupations and geographical location as well as other characteristics. Finally, the structure of the data allows us to implement differences‐in‐differences estimation techniques. Our econometric results are consistent with the view that farmhands were negatively affected by the introduction of serfdom. We complement this analysis with suggestive evidence on reduced opportunities for apprenticeship for young men from rural areas after serfdom was introduced using micro data for apprentices for the city of Odense.

The fourth chapter co‐authored with Kathryn Gary explores border changes and protectionism in the past. We leverage a historical experiment in which Malmö, a city which up until this point had been Danish and located just across the Sound from the capital of Copenhagen, was ceded to Sweden at the end of the Second Northern War. After this event, Sweden established barriers to trade and to human capital flow between its new territories and Denmark, going so far as to prohibit Swedish attendance to Copenhagen University and instead establishing its own university in Lund in 1666. Malmö and its surrounding region, Scania, quickly shifted from an important trade city located within sight of the capital to a distant periphery with limited trade capacity. By using a difference in difference approach on wages from Malmo and rural Denmark we find that incomes in the 18th century Scania were negatively affected by the transition.

The fifth paper turns the attention from Scandinavian countries to the Eastern part of Europe. Thus, in this study I consider the introduction of maize in Romania at the end of the seventeenth century as a shock to agricultural productivity in order to estimate its casual effect on economic development as measured by urban populations. I apply a difference in difference approach on a new data set on urban and rural population based on 183 cities and 219 villages to compare the relative difference in the growth of urbanization, before and after the introduction of maize, between regions that were suitable to adopt maize and regions that were not. I find that maize had a significant negative effect on urbanization, observing a decrease of as much as 3% in population per additional square kilometer suitable for maize situated close to the town.

In sum, the thesis provides new historical data on Danish (and Romanian) economic development. It also brings new knowledge on the effects of serfdom, borders and shocks to agricultural productivity.