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AbstractThe causes and extent of regional inequality in the process of economic growth are at the core of historical economic research. So far, much attention has been devoted to studying the role of industrialization in driving regional divergence. However, empirical studies on relatively unequal countries such as Italy and Spain show that inequality was already high at the outset of modern industrialization. Using new estimates of Swedish regional GDP, this article looks for the first time at regional inequality in a pre‐industrial European economy. Its findings show that inequality increased dramatically between 1571 and 1750 and stayed high until the mid‐nineteenth century. This result refutes the classical view that the industrial take‐off was the main driver of regional divergence. Decomposing the Theil index for GDP per worker, we find that the bulk of inequality from 1750 onwards was driven by structural differences across sectors rather than different regional productivity within sectors. We show that counties with higher agricultural productivity followed a classic Malthusian pattern when experiencing technological advancement, while those with higher industrial productivity did not. We suggest that institutional factors, such as the creation of the Swedish Empire, Stockholm's trading rights, and a protective industrial policy, amplified this exceptional pattern.

AbstractInstitutions for prevention and resolution of industrial conflicts were introduced all over the world in the early twentieth century. We use a new dataset of geocoded strikes and lockouts to analyze the impact of mediation on conflict outcomes in Sweden for the period 1907–1927. Causality is identified by using the distance from the mediator's place of residence to the conflict as an instrument. Despite the mediators' limited authority we find that their involvement in a conflict resulted in about 30 percent higher probability of a compromise. The results add support to institutionalist accounts of the origins of the Swedish Model.

"In dem Beitrag untersuchen wir das Thema des Wachstums und der Konvergenz der regionalen Produktivität in Westeuropa mit Hilfe einer Data-Envelopment-Analyse (DEA), wobei die Arbeitsproduktivität in Effizienzänderung, technische Änderung und Kapitalakkumulation aufgegliedert wird. Aus der Aufgliederung geht hervor, dass die meisten Regionen hinsichtlich der Effizienz hinter die Produktionsfrontier gefallen sind und dass sich die Kapitalakkumulation divergierend auf die Verteilung der Arbeitsproduktivität ausgewirkt hat. Mit Hilfe von Bootstrapping-Methoden werden auch die inhärenten Verzerrungen und stochastischen Elemente in der Effizienzschätzung berücksichtigt. Die Ergebnisse zeigen, dass die relative Einstufung der Effizienzwerte nach einer Korrektur der Verzerrung stabil bleibt, selbst wenn auf räumlich korrelierte Messfehler kontrolliert wird, und dass die Regionen an der Produktionsfrontier durch die DEA erfolgreich als signifikant effizienter als andere Regionen identifiziert werden." (Autorenreferat, IAB-Doku)

This paper addresses the issue of Western European regional productivity growth and convergence by means of Data Envelopment Analysis (DEA), decomposing labour productivity into efficiency change, technical change and capital accumulation. The decomposition shows that most regions have fallen behind the production frontier in efficiency and that capital accumulation has had a diverging effect on the labour productivity distribution. Using bootstrapping methods, the paper also accounts for the inherent bias and the stochastic elements in the efficiency estimation. It is found that the relative ranking of the efficiency scores remains stable after the bias-correction, even after controlling for spatially correlated measurement errors, and that the DEA successfully identifies the regions on the production frontier as significantly more efficient than other regions.

In many countries, regional income inequality has followed an invertedU‐shaped curve, growing during industrialization and market integration and declining thereafter. By contrast,Sweden's regional inequality dropped from 1860 to 1980 and did not exhibit thisU‐shaped pattern. Accordingly, today's regional income inequality inSweden is lower than in other European countries. We note that the prime mover behind the long‐run reduction in regional income differentials was structural change, whereas neoclassical and technological forces played a relatively less important role. However, this process of regional income convergence can be divided into three major periods. During the first period (1860–1940), the unrestricted action of market forces, particularly the expansion of markets and high rates of internal and international migration, led to the compression of regional income differentials. During the next period (1940–80), regional convergence was even more intense. In this period, institutional arrangements favoured the reduction of productivity differentials across industries and successive governments aided the reallocation of the workforce from declining to thriving regions and economic sectors. During the last period (1980–2000), when regional incomes diverged, internal migration and structural change slowed. Furthermore, the development of knowledge‐intensive service industries favoured economic growth in the main metropolitan areas.

In many countries, regional income inequality has followed an inverted Ushaped curve, growing during industrialisation and market integration and declining thereafter. By contrast, Sweden's regional inequality dropped from 1860 to 1980 and did not show this U-shaped pattern. Accordingly, today's regional income inequality in Sweden is lower than in other European countries. We note that the prime mover behind the long-run reduction in regional income differentials was structural change, whereas neo-classical and technological forces played a relatively less important role. However, this process of regional income convergence can be divided into two major periods. During the first period (1860-1940), the unrestricted action of market forces, particularly the expansion of markets and high rates of internal and international migrations, led to the compression of regional income differentials. In the subsequent period (1940-2000), the intended intervention of successive governments appears to have also been important for the evolution of regional income inequality. Regional convergence was intense from 1940 to 1980. In this period, governments aided the convergence in productivity among industries and the reallocation of the workforce from the declining to the thriving regions and economic sectors. During the next period (1980-2000), when regional incomes diverged, governments subsidised firms and people in the declining areas. ; Financial support from the donors of the International Special Fellowship at Lund University School of Economics and Management is gratefully acknowledged (Visiting Fellows Program 2). Rosés also acknowledges financial support from the Spanish Ministry of Science and Innovation (project no. ECO2009- 13331-C02-01. Enflo also gratefully acknowledges funding from the Swedish Research Council (project no. 2008-2023) and from the Jan Wallander and Tom Hedelius foundation (project no W2008-0357:1)

In many countries, regional income inequality has followed an inverted U-shaped curve, growing during industrialisation and market integration and declining thereafter. By contrast, Sweden's regional inequality dropped from 1860 to 1980 and did not show this U-shaped pattern. Accordingly, today's regional income inequality in Sweden is lower than in other European countries. We note that the prime mover behind the long-run reduction in regional income differentials was structural change, whereas neo-classical and technological forces played a relatively less important role. However, this process of regional income convergence can be divided into two major periods. During the first period (1860-1940), the unrestricted action of market forces, particularly the expansion of markets and high rates of internal and international migrations, led to the compression of regional income differentials. In the subsequent period (1940-2000), the intended intervention of successive governments appears to have also been important for the evolution of regional income inequality. Regional convergence was intense from 1940 to 1980. In this period, governments aided the convergence in productivity among industries and the reallocation of the workforce from the declining to the thriving regions and economic sectors. During the next period (1980-2000), when regional incomes diverged, governments subsidised firms and people in the declining areas.

AbstractThis paper documents regional population changes in Sweden since 1860 and investigates how these changes link to regional economic development (regional GDP). We combine long‐term decade population data for the historical counties (1860–2020) with detailed annual population observations for municipalities (1968–2021). As industrialization picked up speed, this benefited regions all around the country in terms of production, at the same time as regional population patterns started to diverge. After a slowdown in the regional GDP convergence processes during the low‐growth period of the 1980s, 'double divergence,' in both population and regional GDP per capita, has characterized Swedish growth patterns since the 1990s.