Events at CERGE-EI

Max Marczinek

University of Oxford, United Kingdom

Abstract: I study the causal impact of labour scarcity on productivity growth, a key driver of long-run economic growth. Exploiting a natural experiment from a 1710s plague outbreak in Northern Europe, I show that plagued regions shift into capital-intensive exports and see an export expansion. Using rich port-level trade data and a Ricardian model, I trace this shift to productivity growth driven by capital deepening. While population levels recover within four decades, the productivity and trade effects persist for almost a century, suggesting long-run changes in comparative advantage. My findings imply that labour scarcity can induce productivity-enhancing reallocation.

Keywords: Labour Scarcity, Productivity, Growth
JEL Classification Codes: F16, O47

Full Text: Labour Scarcity and Productivity: Insights from the Last Nordic Plague