DP13660 The intergenerational effects of a large wealth shock: White southerners after the Civil War

Author(s): Philipp Ager, Leah Boustan, Katherine Eriksson
Publication Date: April 2019
JEL(s): J62, N31, N91
Programme Areas: Economic History
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13660

The nullification of slave-based wealth after the US Civil War (1861-65) was one of the largest episodes of wealth compression in history. We document that white southern households with more slave assets lost substantially more wealth by 1870 relative to households with otherwise similar pre-War wealth levels. Yet, the sons of these slaveholders recovered in income and wealth proxies by 1880, in part by shifting into white collar positions and marrying into higher status families. Their pattern of recovery is most consistent with the importance of social networks in facilitating employment opportunities and access to credit.