One Giant Leap: Emancipation and Aggregate Economic Gains / Richard Hornbeck, Trevon Logan.

Format:

Book

Author/Creator:

Hornbeck, Richard.

Contributor:

National Bureau of Economic Research.

Logan, Trevon.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31758.

NBER working paper series no. w31758

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

We re-characterize American slavery as inefficient, whereby emancipation generated substantial aggregate economic gains. Coercive labor markets were severely distorted, with the social marginal cost of labor substantially above its marginal benefit. Production during enslavement came at immense costs imposed upon enslaved people that reduced aggregate economic surplus, or the total value of output minus total costs incurred. The costs of enslavement are inherently difficult to quantify, which leads to a wide range of quantitative estimates, but we calculate that emancipation generated aggregate economic gains worth the equivalent of a 4% to 35% increase in US aggregate productivity (7 to 60 years of technological innovation). Emancipation decreased output but sparked dramatic aggregate economic gains by decreasing costs substantially more, illustrating the substantial potential for aggregate economic gains in the presence of severe misallocation.

Notes:

Print version record

October 2023.