The Origins and Long-Run Consequences of the Division of Labor

Abstract

This research explores the historical roots and persistent effects of the division of labor in pre-modern societies. Exploiting a novel ethnic-level dataset, which combines geocoded ethnographic, linguistic and genetic data, it advances the hypothesis and establishes empirically that population diversity had a positive effect on the division of labor, which translated into persistent differences in economic development. Specifically, it establishes that pre-modern economic specialization was conducive to pre-modern statehood, urbanization and social hierarchy. Moreover, it demonstrates that higher levels of pre-modern economic specialization are associated with greater skill-biased occupational heterogeneity, economic complexity and economic development in the contemporary era.

Keywords: Comparative Development, Division of Labor, Economic Specialization, Human Capital, Skill-Bias, Population Diversity, Cultural Diversity, Persistence, Human Capital, Skill-Bias

JEL Classification: D74, F10, F14, J24, N10, O10, O11, O12, O40, O43, O44, Z10, Z13