DOI: 10.1162/rest.a.1874 ISSN: 0034-6535
Hostility, Population Sorting, and Backwardness: Quasi-Experimental Evidence from the Red Army after WWII
Christian OchsnerAbstract
How can short episodes of localized hostility shape regional economic trajectories that even amplify over time? I exploit economic differences across the idiosyncratic and short-lived line of contact between the Red Army and the Western Allies in South Austria at the end of WWII. The 74-day hostile presence of the Red Army shaped the age- and occupation-structure via refugee flows, causing amplifying demographic effects over time and backwardness in sector development and tax revenues. My findings also point to the isolated role of the Red Army’s hostile actions after WWII in understanding the European economic East-West divide.