DP18464 Persistent Specialization and Growth: The Italian Land Reform
Land distribution has ambiguous effects on structural transformation: large landowners can slow industrialization by limiting the provision of education, but larger scale and local market power might accelerate the mechanization of production. We examine the effects of redistribution following the Italian 1950 land reform by exploiting novel fine-grained data and find that redistribution led to less industrialization. Agricultural specialization persisted for at least 50 years, consistent with models and data on occupational inheritance. Analysis of several channels highlights the importance of scale reduction and agglomeration. Finally, we show that expropriated areas had lower growth during 1970-2000.