Working Paper: NBER ID: w30451
Authors: Stephan Heblich; Stephen J. Redding; Hansjoachim Voth
Abstract: We provide theory and evidence on the contribution of slavery wealth to Britain’s economic development prior to the abolition of slavery in 1833. We combine data on individual slaveholders from compensation records, an exogenous source of variation in slavery wealth from weather-induced shocks to mortality of the enslaved during the middle passage, and a quantitative spatial model. Exogenous increases in slavery wealth reduce the agricultural employment share, increase the manufacturing employment share, raise the number of cotton mills, and increase property values. Quantifying our model, we find that slavery wealth raises aggregate income by the equivalent of around a decade of economic growth, and increases local income in places with the greatest involvement in slavery by more than 40 percent.
Keywords: Slavery; Economic Development; Industrial Revolution; Wealth Accumulation; Britain
JEL Codes: F60; J15; N63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| slavery wealth (J47) | aggregate income increase (E10) |
| local income in areas most involved in slavery (N91) | increase by more than 40 percent (O49) |
| wealth accumulation (E21) | benefits capitalists (P12) |
| wealth accumulation (E21) | slight disadvantage to landholders (Q15) |
| exogenous increases in slavery wealth (F54) | reduction in agricultural employment share (J43) |
| exogenous increases in slavery wealth (F54) | increase in manufacturing employment share (O14) |
| exogenous increases in slavery wealth (F54) | increase in property values (H13) |
| increase in slaveholder wealth (P19) | increase in property values (H13) |
| increase in slaveholder wealth (P19) | decrease in agricultural employment share (J43) |
| increase in slaveholder wealth (P19) | increase in manufacturing employment share (O14) |