Long-Term Effects of Equal Sharing: Evidence from Inheritance Rules for Land

Charlotte Bartels, Simon Jäger and Natalie Obergruber

No 28230, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: What are the long-term economic effects of a more equal distribution of wealth? We exploit variation in historical inheritance rules for land traversing political, linguistic, geological, and religious borders in Germany. In some German areas, inherited land was to be shared or divided equally among children, while in others land was ruled to be indivisible. Using a geographic regression discontinuity design, we show that equal division of land led to a more equal distribution of land; other potential drivers of growth are smooth at the boundary and equal division areas were not historically more developed. Today, equal division areas feature higher average incomes and a right-shifted skill, income, and wealth distribution. Higher top incomes and top wealth in equal division areas coincide with higher education, and higher labor productivity. We show evidence consistent with the more even distribution of land leading to more innovative industrial by-employment during Germany’s transition from an agrarian to an industrial economy and, in the long-run, more entrepreneurship.

JEL-codes: E02 H24 J24 J43 N13 N14 N23 N24 N33 N34 N53 N54 N93 N94 O3 P42 R52 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-gro, nep-his, nep-lma and nep-mac
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Related works:
Working Paper: Long-Term Effects of Equal Sharing: Evidence from Inheritance Rules for Land (2024)
Working Paper: Long-Term Effects of Equal Sharing: Evidence from Inheritance Rules for Land (2024)
Working Paper: Long-Term Effects of Equal Sharing: Evidence from Inheritance Rules for Land (2020)
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