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What doesn’t kill you makes you stronger? The Impact of the 1918 Spanish Flu Epidemic on Economic Performance in Sweden

Karlsson, Martin and Nilsson, Therese and Pichler, Stefan (2012):
What doesn’t kill you makes you stronger? The Impact of the 1918 Spanish Flu Epidemic on Economic Performance in Sweden.
Darmstadt, In: Darmstadt Discussion Papers in Economics, [Online-Edition: http://tuprints.ulb.tu-darmstadt.de/4715],
[Report]

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 difference-in-differences and high-quality administrative data from Sweden, we estimate the effects on earnings, capital returns and poverty. We find that the pandemic led to a significant increase in poverty rates. There is also relatively strong evidence that capital returns were negatively affected by the pandemic. On the other hand, we find robust evidence that the influenza had no discernible effect on earnings. This finding is surprising since it goes against most previous empirical studies as well as theoretical predictions.

Item Type: Report
Erschienen: 2012
Creators: Karlsson, Martin and Nilsson, Therese and Pichler, Stefan
Title: What doesn’t kill you makes you stronger? The Impact of the 1918 Spanish Flu Epidemic on Economic Performance in Sweden
Language: English
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 difference-in-differences and high-quality administrative data from Sweden, we estimate the effects on earnings, capital returns and poverty. We find that the pandemic led to a significant increase in poverty rates. There is also relatively strong evidence that capital returns were negatively affected by the pandemic. On the other hand, we find robust evidence that the influenza had no discernible effect on earnings. This finding is surprising since it goes against most previous empirical studies as well as theoretical predictions.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 211
Place of Publication: Darmstadt
Uncontrolled Keywords: Spanish Flu; Difference-in-Differences
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > Fachgebiet Finanzwissenschaft und Wirtschaftspolitik
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > Applied Econometrics
Date Deposited: 31 Jan 2016 20:55
Official URL: http://tuprints.ulb.tu-darmstadt.de/4715
URN: urn:nbn:de:tuda-tuprints-47155
Additional Information:

JEL: I18; J31; O40.

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