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ResearchPaper
2019

The fetters of inheritance? Equal partition and regional economic development

Abstract (English)

How can agricultural inheritance traditions affect structural change and economic development in rural areas? The most prominent historical traditions are primogeniture, where the oldest son inherits the whole farm, and equal partition, where land is split and each heir inherits an equal share. In this paper, we provide a theoretical model that links these inheritance traditions to the local allocation of labor and capital and to municipal development. First, we show that among contemporary municipalities in West Germany, equal partition is significantly related to measures of economic development. Second, we conduct OLS and fuzzy spatial RDD estimates for Baden-Württemberg in the 1950s and today. We find that inheritance rules caused, in line with our theoretical predictions, higher incomes, population densities, and industrialization levels in areas with equal partition. Results suggest that more than a third of the overall inter-regional difference in average per capita income in present-day Baden-Württemberg, or 597 Euro, can be explained by equal partition.

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Publication series

Hohenheim discussion papers in business, economics and social sciences; 2019,09

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Faculty
Faculty of Business, Economics and Social Sciences
Institute
Institute of Economics

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Language
English

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Classification (DDC)
330 Economics

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@techreport{Wahl2019, url = {https://hohpublica.uni-hohenheim.de/handle/123456789/6433}, author = {Wahl, Fabian and Huning, Thilo R.}, title = {The fetters of inheritance? Equal partition and regional economic development}, year = {2019}, school = {Universität Hohenheim}, series = {Hohenheim discussion papers in business, economics and social sciences}, }