What Doesn't Kill You Makes You Stronger? The Impact of the 1918 Spanish Flu Epidemic on Economic Performance in Sweden

58 Pages Posted: 4 May 2012

See all articles by Martin Karlsson

Martin Karlsson

affiliation not provided to SSRN

Therese Nilsson

Research Institute of Industrial Economics (IFN); Lund University - Department of Economics

Stefan Pichler

KOF Swiss Economic Institute, ETH Zürich

Date Written: March 30, 2012

Abstract

We study the impact of the 1918 influenza pandemic on economic performance in Sweden. The pandemic was one of the severest and deadliest pandemics in human history, but it has hitherto received only scant attention in the economic literature - despite important implications for modern-day pandemics. In this paper, we exploit seemingly exogenous variation in incidence rates between Swedish regions to estimate the impact of the pandemic. Using di fference-in-diff erences and high-quality administrative data from Sweden, we estimate the eff ects on earnings, capital returns and poverty. We find that the pandemic led to a signi cant increase in poverty rates. There is also relatively strong evidence that capital returns were negatively a ffected by the pandemic. On the other hand, we find robust evidence that the influenza had no discernible e ffect on earnings. This fi nding is surprising since it goes against most previous empirical studies as well as theoretical predictions.

Keywords: Spanish Flu, Di fference-in-Diff erences

JEL Classification: I18, J31, O40

Suggested Citation

Karlsson, Martin and Nilsson, Therese and Pichler, Stefan, What Doesn't Kill You Makes You Stronger? The Impact of the 1918 Spanish Flu Epidemic on Economic Performance in Sweden (March 30, 2012). IFN Working Paper No. 911, Available at SSRN: https://ssrn.com/abstract=2051009 or http://dx.doi.org/10.2139/ssrn.2051009

Martin Karlsson

affiliation not provided to SSRN ( email )

Therese Nilsson (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Lund University - Department of Economics ( email )

P.O. Box 7082
S-220 07 Lund
Sweden
+46 46 222 46 43 (Phone)

Stefan Pichler

KOF Swiss Economic Institute, ETH Zürich ( email )

Leonhardstrasse 21
Zurich, 8092
Switzerland

HOME PAGE: http://www.kof.ethz.ch

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