Thread by @joachim_voth

Did slavery facilitate Europe's early rise to riches? Steve Redding @ReddingEcon, Stephan Heblich, and I focus on the single biggest slave-trading nation, Britain, and revisit the famous "Williams hypothesis". We combine theory and geographically disaggregated data to show

that areas with more slavery wealth were less agricultural, had more cotton mills, adopted more steam engines, had higher per capita wealth, and employed more people in manufacturing. We use weather shocks to slave traders wealth to document an exogenous link running from slave

trading to slave holding in 1833, when slavery was officially abolished. Using data from the compensation committee, we document that areas with plausibly exogenous more slave wealth developed faster; we make sense of this pattern in a geographically disaggregated dynamic factor

model. Calibrations suggest that worker welfare would have been at least 3% less in the absence of overseas slavery; capitalists gained the most, while landlords missed out. Our model shows that gains and losses were also unevenly distributed in space, with locations gaining the

most seeing increases in welfare by 40% or more. Prior to Britain's involvement in the slave trade, places with lots of slave wealth in 1833 were no richer, reducing concerns about reverse causation.

The paper is here: princeton.edu/~reddings/pape…
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