Ethnic Capital and Sub-National Development: Armenian and Greek Legacy in Post-Expulsion Turkey
70 Pages Posted: 18 Nov 2018
Date Written: October 27, 2018
Does historical exposure to highly-skilled populations lead to path-dependence in regional development? To answer this question, we study the long-term economic legacy of Armenians and Greeks of the Ottoman Empire using their mass expulsions from Anatolia as a unique natural experiment of history. Since these consecutive events led to a complete and permanent removal of both communities from Turkey within a short time period, our analysis can rule out any contemporaneous minority influence on development. Results on the sample of Turkish districts suggest that historical Armenian and Greek presence left a positive long-term legacy on contemporary population density, urbanization, and economic activity. We also exploit within-district variation across 49,000 villages and neighborhoods to document a highly localized minority influence. Those localities in close proximity to Armenian and Greek community buildings are more prosperous today than their otherwise similar counterparts. An important mechanism of persistence is the minority legacy on local human capital accumulation among Muslims. In the past, Muslims in historically high-minority areas had greater levels of human capital than Muslims in low-minority areas; and this difference persists to date.
Keywords: Human Capital, Economic Development, Expulsion, Minorities, Ethnicity, Armenians, Greeks, Persistence
JEL Classification: J15, O10, O15, O53, N35, Z12
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