- Thursday, June 21
- 12:15 PM
- Kaiserplatz 7-9, 4th floor, Room 4.006
Tordesillas, Slavery and the Origins of Brazilian Inequality, joint with Thomas Fujiwara and Humberto Laudares
This article studies the long-term impact of slavery on economic inequality at the receiving end of the spectrum. We focus on Brazil, one of the largest slave importers and the last country to abolish this institution in the Western Hemisphere, in 1888. To deal with the potential endogeneity of slavery placement, we use a spatial Regression Discontinuity (RD) framework, exploiting the Tordesillas line, which divided Portuguese and Spanish empires in modern-day Brazil. We find that the number of slaves in 1872 is discontinuously higher in the Portuguese side of the border, consistent with this colonial power’s historical comparative advantage in this trade. We then show how this discontinuity has led to higher income inequality of 0.103 Gini coefficient points, approximately 20% of average Brazilian income inequality. In terms of mechanisms, we further find that more slave intensive areas have higher income and educational racial imbalances and worse public institutions today. To study the effect of slavery at the intensive margin, we use the division of the Portuguese colony into Donatary Captancies. To disentangle the colonizer identity effect, we exploit the Dutch colonization of Brazil.