War and Structural Transformation: Evidence from Germany

Talk by Tobias Korn (Leibniz Universität Hannover) as part of the Research Seminar Series of the IOS Economics Department.

This paper investigates the effect of World War I casualties on structural transformation in Weimar Germany. We newly geocode the birthplaces of 8.5 million wounded and killed German soldiers, and link these data to German county-level census data before and after WW I. Our main results are based on Continuous Difference-in-Differences estimations and show that counties with a higher human loss fell behind adopting a modern factory system. We trace this effect to a shortage of hard-to-replace white collar workers, especially in the crucial tertiary sector. Our study contributes to the understanding of the economic consequences of war during critical periods of economic transformation.