This paper assesses the causal relationship between POW assignments and labor productivity for a vital sector of the German World War I economy, namely coal mining. Prisoners of war (POWs) provided significant labor. Combining data on all Ruhr mines with a treatment-effects approach, I find that POW employment alone accounted for 36 percent of the average POW-employing mine's annual productivity decline over wartime. Estimates also suggest that the representative POW's productivity averaged 32 percent of the representative regular miner's productivity and that POWs' contribution to wartime coal output amounted to 3.9 percent. Violence did not serve as a powerful work incentive.
Abstract World War I was fought by numerous countries siding together as the Central Powers and, respectively, the Allied Powers. The former began with the German Empire and Austria-Hungary and grew to four allies when the Ottoman Empire entered the scene in late 1914 and Bulgaria in late 1915; the latter centred on the alliance between England, France, and Russia and was informally extended to many more countries as they entered into the war ad-hoc by signalling common interests with the core Allied Powers. This article addresses a neglected dimension of the alliance formation phenomenon, namely how alliances were perceived by the public, in contrast to the perceptions of political and military leaders. Were the Central and Allied Powers perceived to be credible alliances – monolithic blocks – in the eyes of contemporaries? We seek to determine the degree of "alliance integration" among pairs of countries by applying cointegration analysis based on prices for securities. It is assumed that the prices of countries perceived as "integrated" should show signs of co-movement. In particular, we focus on the Amsterdam market for foreign government bonds providing us with a neutral perspective. Our analysis is based on the yields for representative bonds traded by 13 belligerent countries not only during the war, but also before and after. Among other findings, we cannot corroborate that investors simply recognized two monolithic blocks fighting the war against each other.
The scholarly discourse about twentieth century forced labour has raised important questions. For example, how profitable and productive has the employment of forced labour been in different political and economic contexts? The dominant take-away from the literature is that forced labour comes with negative productivity, but positive production effects. Yet much evidence on productivity is anecdotal. To add a new quantitative take on this issue, this paper analyses the natural experiment conducted in World War I Ruhr coal mining, where, beginning with 1915, Prisoner-of-War (POW) labour was successively employed in many, but not all mines. The question to be answered is whether mines employing POW labour incurred significant labour productivity losses compared to non-POW employing mines that cannot be explained otherwise. To this end, we borrow from the treatment effects literature and implement two estimators – a baseline difference-in-difference fixed effects estimator and a doubly robust treatment effects estimator. Our study is the first to assess the productivity effects of POW employment using a full population of establishments of a particular industry. Our findings strongly support the view that the benefits from employing POW labour – i.e., the output-effect – came at the expense of a significant loss in productivity.
Abstract The United Nations' Human Development Index (HDI) has become an important tool for measuring and comparing living standards between countries and regions. However, the HDI has also attracted a fair share of conceptual criticism. Starting from Andrea Wagner's historical estimations of a HDI for Germany in the interwar and early postwar period, we take up part of that criticism by implementing three essential modifications to the mode of calculation. We test how far they alter our picture of the relative living standard in the Weimar Republic, the Third Reich, and the Federal Republic of Germany. First, we replace the arithmetic mean by the geometric mean, which is said to solve the problem of perfect substitutability; second, we extend the HDI by an additional fourth dimension measuring economic and political freedom – an important, though neglected, dimension; and third, as the perhaps most crucial conceptual intervention, we develop weighting schemes for the partial indices that are theoretically backed by happiness economic research. Thus, we challenge the common, but arbitrary fundamental assumption that all partial indices receive equal weights. Our results show that the HDI for Germany reacts very sensitively to conceptual interventions, making it difficult to use it for the intertemporal and international comparison of living standards. We also find that the proposed modified HDIs allow for a re-evaluation of the living standard in interwar Germany; and in contrast to what the reference estimations on the HDI for Germany say, there is a profound discontinuity between the Third Reich and post-war Germany in terms of living standards.
World War I was fought by numerous countries siding together as the Central Powers and, respectively, the Allied Powers. The former established around the German Empire and Austria-Hungary and grew to four allies when the Ottoman Empire in late 1914 and Bulgaria in late 1915 entered the scene; the latter centered on the alliance between England, France, and Russia and was informally extended to many more countries as they entered into the war ad-hoc by signaling common interests with the core Allied Powers. This article addresses an oft-neglected dimension of the alliance formation phenomenon, namely how alliances were perceived by the public, in contrast to military leaders' perceptions of each other. Were the Central and Allied Powers perceived as credible alliances - monolithic blocks - right at the time? We seek to determine the degree of 'alliance integration' among pairs of countries by applying cointegration analysis based on securities prices. It is assumed that prices of countries perceived as 'integrated' should show signs of co-movement. More specifically, we focus on the Amsterdam market for foreign government bonds providing us with a neutral's view on that matter. Our analysis is based on the yields for 13 belligerent countries' representative bonds traded during the war, but also before and after. Among other things, we cannot corroborate that investors recognized two monolithic blocks simply fighting the war.
Throughout the late 1920s, German coal mining saw an exceptional surge in labour productivity, led by the performance of the Ruhr coal mines. It is commonly accepted in the relevant literature that the economy‐wide 'rationalization boom' explains that pattern. This study tests the related hypothesis that 'negative rationalization', in the form of a massive wave of mine closures over the period 1924–9, played a significant role in stimulating aggregate labour productivity in the Ruhr coal district. Using an original dataset for the totality of Ruhr coal mines, the causes of productivity change over the broader period 1913–38 are identified, using the decomposition method of Foster, Haltiwanger, and Krizan. Results suggest that labour productivity was driven largely by improvements at individual mines, attributable to the intensified mechanization of underground operations. In sharp contrast, turnover effects were marginal, overall, compared to the effects stemming from the producer dynamics among surviving mines. Thus, the practical productivity implications of mine closures during the rationalization boom are negligible and overrated in the literature. These findings indicate the necessity of testing the relative importance of 'negative rationalization' in the form of plant closures in other branches of the Weimar economy.
The discussion of the rationalization wave in German industry (1924–1929) still lacks proper industry-level estimates of the rate of technological progress. To close part of this gap, this article investigates total factor productivity (TFP) growth in hard coal mining over the extended period 1913–1938. Stochastic Frontier Analysis is applied to a sample of firms from the Ruhr coal district. TFP grew positively overall and specifically from 1924–1929. Surprisingly, however, TFP growth was even faster from 1933–1938, suggesting that the Nazi economy heavily capitalized on the Weimar rationalization movement, the effects of which are usually not traced beyond 1932.
Many public pension insurance schemes today use the pay‐as‐you‐go financing mechanism. This mechanism is vulnerable to an ageing population, which puts pressure on the intergenerational contract implicit in these schemes and raises the question as to how they might be eroded. This is not a new problem, and to put it into historical perspective, this article studies the intergenerational contract that formed the core of the Prussian miners' invalidity insurance in the nineteenth and the early twentieth century (1861–1920). With the so‐called Knappschaften, miners relied on what was probably the most comprehensive and advanced occupational pension system existing in Germany around the time when Bismarckian social insurance was established. Financed via the pay‐as‐you‐go mechanism, the miners' pension funds faced stress from their ageing memberships early on, and this potentially undermined their ability to maintain intergenerationally fair pensions. In order to examine whether or not the intergenerational contract among German miners showed signs of erosion, we look at the Knappschaftens' profitability, as measured by actual and promised internal rates of return. This article shows that the intergenerational contract indeed weakened over time unless miners' funds were large and continued to grow, and that a pension reform in 1906 served to stabilize generosity.
Abstract This study uses prices for the German 3 percent imperial loan issued in several tranches since 1890 and still traded during World War I to measure capital market players' real-time perceptions of the prospects for Germany as the war proceeded. Price data are gathered from the Amsterdam market for government bonds; the Netherlands remained neutral throughout war. Focusing on the window from August 24th 1915 to August 11th 1919, ten (twelve) turning points are identified in a baseline (extended) model. Each implies a significant adjustment of lenders' confidence in Germany being able, or willing, to service its debts in the future. Two turning points stand out. In early January 1916, the price plummeted by 14.3 percent between the first and eleventh of the month, which was most likely due to the Military Service Act discussed in the British parliament. On September 19th 1918, the price dropped by 17.5 percent compared to the last available price quote from the end of July. This coincides with the Allied Powers' revival on all fronts since the summer, leading to the ultimate collapse of the German lines.
This study uses prices for the German 3 percent imperial loan issued in several tranches since 1890 and still traded during World War I to measure capital market players' real-time perceptions of the prospects for Germany as the war proceeded. Price data are gathered from the Amsterdam market for government bonds; the Netherlands remained neutral throughout war. Focusing on the window from August 24th 1915 to August 11th 1919, ten (twelve) turning points are identified in a baseline (extended) model. Each implies a significant adjustment of lenders' confidence in Germany being able, or willing, to service its debts in the future. Two turning points stand out. In early January 1916, the price plummeted by 14.3 percent between the first and eleventh of the month, which was most likely due to the Military Service Act discussed in the British parliament. On September 19th 1918, the price dropped by 17.5 percent compared to the last available price quote from the end of July. This coincides with the Allied Powers' revival on all fronts since the summer, leading to the ultimate collapse of the German lines.
"This article introduces the Knappschaft statistics as a basic source for quantitative data on a very important topic in historical social research, namely the rise of the welfare state. Scholars who seek to embark upon historical social research in that direction require both qualitative and quantitative data. Exploring data sources and making data available for general use thus is crucial to systematic research and scholarly discourse. For the period 1861 to 1920, the Knappschaft statistics document the operation of the various German Knappschaftsvereine as the carriers of miners' occupational social insurance at the time. Data on the various Knappschaften are quite rich enabling us to use them as a 'historical laboratory' not merely to study the welfare positions of and social relations in a particular societal class in a particular period, but to explore more general questions related to the roots of modern welfare states, their functioning, and the challenges they face. To stress this point, the author combines the concise overview of the Knappschaft statistics with a straightforward application to the question of the consequences of aging in a pay-as-you-go pension system." (author's abstract)
Um die Mitte des 19. Jahrhunderts verfügten die deutschen Bergleute mit den Knappschaftsvereinen über ein eigenes institutionalisiertes Sozialversicherungssystem, dessen historische Wurzeln bis zurück ins Mittelalter reichen und das insbesondere auch beispielgebend für die Ausgestaltung der Bismarckschen Sozialversicherung war. Mit Blick auf die Periode zwischen Knappschaftsgesetz einerseits und Gründung der Reichsknappschaft andererseits (1854-1923) untersucht diese Arbeit ein versicherungsökonomisches Problem, über das bereits die zeitgenössischen Beobachter der Knappschaftsvereine intensiv diskutierten: Wie ist die optimale Größe eines Sozialversicherungsträgers zu bestimmen und zu implementieren? Gibt es überhaupt eine "optimale" Größe oder gilt nicht vielmehr "je größer, desto besser"? Diese Fragen am historischen Beispiel zu untersuchen, ist Ziel der vorliegenden Arbeit.
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