The fetters of inheritance? Equal partition and regional economic development

Abstract

How can agricultural inheritance traditions affect structural change and economic development in rural areas? The most prominent historical traditions are primogeniture, where the oldest son inherits the whole farm, and equal partition, where land is split and each heir inherits an equal share. In this paper, we provide a theoretical model that links these inheritance traditions to the local allocation of labor and capital and to municipal development. First, we show that among contemporary municipalities in West Germany, equal partition is significantly related to measures of economic development. Second, we conduct OLS and fuzzy spatial RDD estimates for Baden-Württemberg in the 1950s and today. We find that inheritance rules caused, in line with our theoretical predictions, higher incomes, population densities, and industrialization levels in areas with equal partition. Results suggest that more than a third of the overall inter-regional difference in average per capita income in present-day Baden Württemberg, or 597 Euro, can be explained by equal partition.

Parliamentary Constraints and Long‐Term Development: Evidence from the Duchy of Württemberg

“…This also highlights potential links between different regimes and growth (e.g., Acemoglu et al 2019;Knutsen et al 2019;Wright 2008). Finally, I contribute to explaining the economic success of Baden-Württemberg, which is one of the most wealthy and innovative regions in Europe (e.g., Huning and Wahl 2021).…”

“…In addition, the threat of war helped trigger the first assembly. As inheritance and warfare has been shown to influence economic development (e.g., Dincecco and Onorato 2016; Huning and Wahl 2021), I assess whether differences in inheritance traditions and conflict exposure matter for my analysis in the online supporting information (pp. 9–12, 27).…”

“…2019; Wright 2008). Finally, I contribute to explaining the economic success of Baden‐Württemberg, which is one of the most wealthy and innovative regions in Europe (e.g., Huning and Wahl 2021).…”

“…In addition, I have therefore constructed two proxies for industrialization. First, the share of the employed population that works within the agricultural sector in 1970 (see, e.g., Huning and Wahl 2021, for similar use) based on (LeoBW 2020). To measure historical industrialization, I use an overview of towns with factories in 1833 from Feyer (1988) and create an indicator that is equal to 1 if a town had a factory in 1833, and 0 otherwise.…”

Cliometrics and the Study of German History

“…In a series of clio papers exploiting micro-level data on 18 thand 19 th -century emigrants from Hesse-Cassel, Wegge (e.g., 1998Wegge (e.g., , 2017 investigates their characteristics and the determinants of their emigrating into the US and toward other destinations. She finds, among 54 others, that chain migration was also extremely important for directing international migration; that the impartible inheritance of land increased the incentive to emigrate (a fact lately corroborated by Huning and Wahl 2021); that artisans were more likely to emigrate than farmers and laborers; and that emigrants into Australia were generally poorer and less skilled compared to those emigrating into the US or toward South America. Furthermore, Grant (2003) argues that it was the competitive pressure arising from the "new immigration" into the US, that led to the secular decline of the German emigration rate since the late 1870s.…”