The next RITM Economics Seminar will be held on Tuesday, November 5th from 12h15 to 13h15, in room Gaudemet (Sceaux).
Abstract: This paper shows that while generating aggregate gains, market integration may worsen the conditions of some workers due to organizational changes. To measure the extent of this reallocation, we use data on individual bankrupts during the rail expansion in 19th-century Britain. Our estimators leverage within geography-time and within sector-time variation to measure sector-specific effects of the rail on both employment and bankruptcies. A connection to railways increased bankruptcies only in the manufacturing sector, while it also increased employment in this sector. Both a three-way fixed effects and a Least Cost Path approach validate the causality of our estimate. We further show that our results can be explained as the manufacturing sector experienced organizational changes following market integration. Firms expanded; self-employment decreased, occupations diversified; overall, the nature of labour changed. Because of this biased growth in manufacturing, some of its workers experienced financial distress.
Link to the RITM Economics seminar web page