On the Move: Essays on the Economic and Political Development of Sweden

! "#$% $&'##( ) * + * ,$"' - '- . ! " !#/ $0 '- * 1 * '! * * ' * 1 ' $ % & # 2 3 * ' 4 * '- . 22 5$67#$0$89' * : * '- * 1 '1 * * * ' ' ( ' )& *+ ( + #/ $0 '- * 1 * ' ' - * * '1 * '! * '* "# ' 1 ' , $, + -! + !.///0112#- * ' * 3 ' * ' * 3 ' * * '; ' 3) "#$% .<<'' < =>.. ..$&70"7 ;?(0%60$% &008$8 ;?(0%60$% &008"# ;(#8& 60" *$ *$# 0$ On the Move: Essays on the Economic and Political Development of Sweden Erik Prawitz ii c Erik Prawitz, Stockholm University, 2017 ISBN print 978-91-7649-931-3 ISBN PDF 978-91-7649-932-0 ISSN 0346-6892 Cover Picture: Migrant Per Fröjd in Moline, Illinois. Copyright by Monica H˚akansson. Reprinted with permission. Printed in Sweden by Universitetsservice US-AB, Stockholm 2017 Distributor: Institute for International Economic Studies iii Till Eleonora. iv Acknowledgments A wise professor at the Institute once said, that a researcher needs to possess three traits. The researcher needs to be creative, meticulous and persuasive. Or something similar, I don’t remember exactly. It is anyways true. You need to come up with some sort of creative and hope- fully interesting research question, you need to beat your head against the wall to answer it and, finally, you need to persuade an audience that what you have done makes sense. Also, each part is supposed to be done well. Along the way towards this PhD, I am lucky to have met many different people that have helped me and guided me in parts I have felt less equipped in. I owe a lot to them and I want to thank a few of them here. First and foremost, I want to thank my supervisor, Jakob Svensson. He has constantly pushed me to do my best in all different parts of the game and has caringly supported me during my tougher periods. His advice has been invaluable in producing this thesis. Starting as an RA at the Institute, my first contact with Jakob was when I was supposed to find latitudinal coordinates to a set of longi- tudinal coordinates. Apparently, some field RA in Uganda had missed filling out the former. I was tempted to make them up, but I ended up tracking every single one of them down. Soon I stopped shaving and wanted to become a development economist. This was some time after my period as a wannabe labor economist trying to grow a moustache like Lars Calmfors, to whom I owe a lot, since he was one of the reasons I ended up pursuing this PhD. After a while I moved towards economic history (or maybe economics using historical data) and in particular the Swedish one. After all, Swe- den back then was like a developing country I told myself. And I would not have to do long field trips. Two people were particularly influen- tial in this decision. One was Nancy Qian, who asked me to work on a project concerning the Swedish electrification together with her and v Nathan Nunn; both taught me a lot on how to confront a research prob- lem. The other was Mounir Karadja, in whom I found a friend and a terrific co-author. A great part of this thesis is the result of our collab- oration. I hope and think that we can continue to work on new projects soon, although you told me recently that you secretly hate history. Two other persons at the Institute stand out as particularly impor- tant for this thesis. I am not sure if they are formally my co-advisors, but they have both played that part. I want to thank Torsten Persson, who has been a truly inspirational intellectual. He guided me through my job market period with patience and with amazing advice on how to struc- ture a hopeless job market paper. I want to thank David Strömberg, who always had splendid suggestions on how to solve my many research troubles. With him I have had my most constructive lunch breaks, going for speedy 11.30 o’clock lunches. Furthermore, I want to thank the rest of the faculty at the IIES for their time and support. In particular Konrad Burchardi, Jon de Quidt, Masa Kudamatsu, Arash Nekoei, Peter Nilsson and Robert Ostling,¨ as well as Per Krusell, not least for his sportsmanship. Outside of the walls and floors of the Institute, I am thankful to Per Pettersson-Lidbom at the Department, for his always-interesting private lectures about Swedish 19th century history. Moreover, I want to acknowledge the adminis- trative staff at the IIES, in particular Christina Lönnblad, who, among other things, helped me with excellent proof reading, and Karl Eriksson, who I pestered on a regular basis. My co-authors in this thesis deserve a special thank you. Besides Mounir, I want to thank David Andersson, who taught me about the historical Swedish patent system and impressed me with his tireless archival skills. I am grateful to Thor Berger, with whom I became friends with by e-mail, talking about historical data. We finally met at a conference and eventually ended up writing a paper together. Several office mates have made these years so much more enjoyable, most recently Nathan Lane and Sirus Dehdari. Nathan was, together with Arieda Muco, an invaluable friend during the last year. Before vi them, I had the pleasure of sharing an office with Martin Berlin, Pamela Campa, Andrea Guariso, Niels-Jakob Harbo Hansen, Mounir Karadja, Hanna Mühlrad and the one and only Shuhei “Shu” Kitamura. I am thankful for all the interesting and fun discussions I have shared with many different students during these years. Here I want to mention Johan Egebark and Niklas Kaunitz, with whom I shared an apartment during my year at Berkeley. Moreover, Laurence Malafry and PO Rob- ling, as well as Audi Baltrunaite, Sara Fogelberg, Manja Gärtner, Karin Hederos, Hannes Malmberg, Arieda Muco, Benni Lerva, Thorsten Ro- gall, Anna Sandberg, Miri Stryjan and Erik Oberg,¨ among many others. Thank you all. Outside of the academic jungle, I am thankful to all my close friends for their moral support and for not losing sight of me. In particular, I need to mention Adam Holmberg (and the Copenhagen crew), Jens Pettersson, and Anneli Enquist, Maja Alton and co. I am eternally grateful to my parents for their unconditional love and belief in me. My father has always been an intellectual role model. My mother is a hero. I am indebted to my sisters for all their love and wisdom. A special thank you goes to my mother- and father-in-law, for their love and astonishing support, allowing me to finish this thesis. Finally, I want to thank Eli and Eleonora. My dearest Eli, who cannot yet read this, changed my world when he came to me in the middle of this PhD, mostly for the better. Eleonora, you have been my closest ally and my love during all these years – thank you for everything. Stockholm August, 2017 Erik Prawitz Contents Acknowledgements......................... iv 1 Introduction 1 References.............................. 6 2 Exit, Voice and Political Change: Evidence from Swedish Mass Migration to the United States 9 1 Introduction.......................... 9 2 Background.......................... 16 3 Data.............................. 21 4 Empiricalframework..................... 25 5 Frostshocks,travelcostandemigration.......... 32 6 Demandforpoliticalchange................. 37 7 Mechanisms.......................... 42 8 Emigrationandlocalgovernments............. 47 9 Placeboandrobustnesstests................ 51 10 Aretheeffectspersistent?.................. 54 11 Discussionandconclusion.................. 55 References.............................. 57 Tables................................ 66 Figures............................... 77 AppendixA:Dataandsupportingevidence........... 88 AppendixB:Robustnessandplacebotests........... 94 Appendix C: Full regression output . ...............104 vii viii CONTENTS 3 Mass Migration, Cheap Labor, and Innovation 113 1 Introduction..........................113 2 Historicalbackground....................121 3 Data..............................126 4 Empiricalframework.....................130 5 Frostshocks,travelcostsandemigration..........139 6 Massmigrationandtechnologicalprogress.........143 7 Possiblechannelsofcausality................149 8 Conclusions..........................162 References..............................163 Tables................................170 AppendixA:Robustnessandplacebotests...........181 AppendixB:Additionaltables..................192 AppendixC:Additionalfigures..................196 AppendixD:Thepatentdata...................200 4 On the Right Track: Railroads, Mobility and Innovation During Two Centuries 203 1 Introduction..........................203 2 Historicalbackground....................210 3 Data..............................214 4 Empiricalframework.....................215 5 Mainresults..........................223 6 Mechanismsatwork.....................234 7 Persistence..........................240 8 Conclusions..........................241 References..............................242

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