Thread by @BooKang_Seol

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👉 Fractionalization along dimensions like ethnicity or class can undermine economic performance.

❓How does fractionalization affect social groups’ abilities to respond to economic shocks?

I study this question in the context of 70s Korea.

Why study Korea?

1) The unique Korean social context isolates one dimension of fractionalization: the density of family clans that shared the same parental lineage.

2) Korea's structural transformation in the 70s saw a 60% growth in agricultural output per household.

I combine the cross-sectional variation created by family clan density with the time variation in market access created by the construction of a new bridge, the Namhae bridge, in 1973.

Using data from newly digitized historical documents, I find that less fractionalized villages experienced 30% faster agricultural productivity growth, driven by...

1) technology adoption and
2) complementary investments in public goods

But, why was this possible?

I find suggestive evidence that they have a more cohesive society--shown in the number of village meetings, the number of participants in the meetings, and village projects.

The results suggest that social fractionalization influences local-level responses to new economic opportunities and policies.

These results also help explain the success of Korea’s rural development.

Thanks for reading!

Full paper available at: bookangseol.com