Description:

Matteo Magnaricotte  (Northwestern University): presenting "Local Specialization and Growth: The Italian Land Reform" (joint work with Riccardo Bianchi-Vimercati and Giampaolo Lecce)

Abstract: This paper analyzes a large-scale redistribution policy and its short- and long-term effects on industrial structure and economic development. We focus on a major land reform implemented by the Italian government in the 1950s. We assemble a novel dataset on the expropriations at the municipal level and on pre- and post-reform socio-economic characteristics. A difference in difference model provides evidence that areas with higher incidence of expropriations reported more employed workers in the agricultural sector (and less in the manufacturing one) in the aftermath of the reform. This result persists over the decades. Finally, we analyze the long-term impact of the reform and, using a matching estimator, we provide evidence of a negative effects on economic growth in the long run: municipalities exposed to the land redistribution are associated with significantly lower income growth in the period 1970-2000.