ARTICLES
The low return to English fluency during the Age of Mass Migration
Zachary Ward
Pages 219–242
https://doi.org/10.1093/ereh/hez007
English skills are highly valuable for today’s immigrants, but has this always been the case? I estimate the premium for English fluency and the rate of language acquisition in the early 20th century US using new linked data on over two hundred thousand immigrants. Few early 20th century immigrants arrived with English proficiency, yet many acquired language skills rapidly after arrival. Based on individual fixed effects, acquiring English fluency was associated with a small upgrade in occupational income. The results suggest that English fluency was less important for economic assimilation in the early 20th century than in recent decades.
Labour frictions in interwar Britain: industrial reshuffling and the origin of mass unemployment
Ivan Luzardo-Luna
Pages 243–263
https://doi.org/10.1093/ereh/hez001
This article estimates the matching function of the British labour market for the period of 1921–1934. Changes in matching efficiency can explain both employment resilience during the Great Depression and the high structural unemployment throughout the interwar period. Early in the 1920s, matching efficiency improved due to the development of the retail industry. However, the econometric results show a structural break in March 1927, related to a major industrial reshuffling that reduced the demand for workers in staple industries. Since these industries were geographically concentrated, there was an increase in the average distance between the unemployed and vacancies, and matching efficiency declined.
Career incentives in political hierarchy: evidence from Imperial Russia
Gunes Gokmen and Dmitrii Kofanov
Pages 264–287
https://doi.org/10.1093/ereh/hey033
This paper studies political career incentives in a nondemocratic historical setting to assess early political institutions. We construct a novel panel database of governors of Imperial Russia in 91 provinces between 1895 and 1914. Measuring an imperial governor’s performance by his ability of peacekeeping, we test whether the central authorities in the Russian Empire resorted to career incentives to improve the performance of provincial governors. We find that the central administration promoted better performing governors only in the peripheral provinces (oblasts), but not in the main ones (gubernias). In addition, we show that political connections had no significant effect on career prospects.
Trade and nationalism: market integration in interwar Yugoslavia
Luka Miladinović
Pages 288–313
https://doi.org/10.1093/ereh/hez002
This article empirically analyses the relationship between nationalism and regional economic integration in the Kingdom of Yugoslavia between the First and the Second World War. It argues that prevailing nationalism had a negative impact on the economic integration of the regions within the Kingdom and further contributed to the political disintegration of the Kingdom. The analysis implies that the ideology of nationalism increased trade costs and thus retarded economic interconnectivity in the Kingdom of Yugoslavia, notwithstanding the favorable trade environment and the desire of the central elites to discourage ethnocentric sentiment.
Foreign capital in 19th century Spain’s investment boom
Leandro Prados De La Escosura
Pages 314–331
https://doi.org/10.1093/ereh/hey026
Spain’s investment boom (1850–1874) has been largely attributed to capital inflows. Sudrià challenged the consensus on the basis of Moro et al. capital balance estimates. Dishoarding of bullion and previous savings would have catered for an increasing investment demand. I argue that the empirical basis for Sudrià's claim is flawed. Moro et al. underestimated the net capital inflow and biased upwards the change in reserves. The current account deficit resulted from an inflow of capital that allowed investment to raise facilitating imports of capital goods and raw materials. Foreign capital contributed significantly to the investment boom.
Learning how to manage risk by hedging: the VOC insurance contract of 1613
Oscar Gelderblom and others
Pages 332–355
https://doi.org/10.1093/ereh/hez003
We examine an unusual contract which the Dutch East India Company (VOC) sold to investors in 1613. The firm was in a position as modelled by Froot, Scharfstein and Stein for modern corporations: facing heavy, strategic investment, about to reap the benefits, but unable to attract the necessary capital. Hedging or insurance then makes sense to safeguard continued operations. Understanding this, the VOC directors took out insurance on incoming cash from return cargoes. We analyze the contract’s price and underwriters and contrast the VOC’s single use of this peculiar instrument with the English East India Company’s later repeated application.
A microanalysis of trade finance: German bank entry and coffee exports in Brazil, 1880–1913
Wilfried Kisling
Pages 356–389
https://doi.org/10.1093/ereh/hez006
The trade-finance nexus has enjoyed increasing interest in recent economic studies, but empirical evidence is scarce and studies from a historical perspective seem missing. This study analyses the effect of German bank entry on Brazilian coffee exports between 1880 and 1913 using firm-level data. I create an original data set on the yearly quantities of exported coffee and the credit received from the German Brasilianische Bank für Deutschland by export houses in Brazil. Using a difference-in-difference approach, I find that Brasilianische eased previously existing credit constraints, and that companies financed by Brasilianische exported significantly more than those that were not.
Danger to the Old Lady of Threadneedle Street? The Bank Restriction Act and the regime shift to paper money, 1797–1821
Patrick K O'Brien and Nuno Palma
Pages 390–426
https://doi.org/10.1093/ereh/hez008
The Bank Restriction Act of 1797 was the unconventional monetary policy of its time. It suspended the convertibility of the Bank of England's notes into gold, a policy that lasted until 1821. The current historical consensus is that it was a result of the state's need to finance the war, France’s remonetization, a loss of confidence in the English country banks, and a run on the Bank of England’s reserves following a landing of French troops in Wales. We argue that while these factors help us understand the timing of the suspension, they cannot explain its success. We deploy new long-term data that leads us to a complementary explanation: the policy succeeded thanks to the reputation of the Bank of England, achieved through a century of prudential collaboration between the Bank and the Treasury.
