Gold, Coal and Iron : Essays on Industrialization and Economic Development

Abstract: Essay I: How does electricity provision affect female employment? In theory, electrical household appliances can save labor in domestic production and divert it to the market. However, the empirical evidence has been inconclusive. Many studies from contemporary rural electrification projects face difficulties with bundled infrastructure, and cannot account for variation in the quality of supply. In this paper, I study how Tajik women responded to a five-year-long energy crisis resulting from the breakdown of Tajik-Uzbek electricity trade in late 2009, that reduced winter-time electricity access to a few hours per day. I produce reduced-form evidence that an intensive margin reduction in electricity access leads to lower female employment as women exit the labor force to become homemakers. The effect is specific to women and does not appear to be driven by changes in labor demand, involuntary unemployment, labor migration or fertility. However, the employment effect is accompanied by lower adoption of labor-saving electrical appliances. These results suggest that electricity provision plays an important role in facilitating the release of female labor from unpaid domestic work. Furthermore, the findings emphasize that the quality of electricity supply is critical for unlocking the full benefits of electrification in developing countries.Essay II: The relationship between rural industries and agriculture during the early stages of economic development is not well understood, despite its potentially central role in economic transformations. I investigate the expansion of small-scale gold mining and processing in north-western Tanzania between 2008 and 2012, and find that small-scale mining causes nearby households to allocate fewer resources to agricultural production and reduce their agricultural output. My findings thus contradict the hypothesis that rural non-farm sector activities generate positive spillover effects for smallholder agriculture in Sub-Saharan Africa by mobilizing agricultural investments. Instead, Tanzanian households appear to substitute away from agricultural activities when outside options improve. The results of this paper confirm that small-scale gold mining increases the consumption levels of nearby households, while having no overall negative effects on school attendance or health outcomes of children. Therefore, while the emergence of small-scale mining does not appear to initiate leaps in agricultural development, it can play an important role in alleviating rural poverty in the short- to medium run.Essay III (with Niklas Bengtsson and Raoul van Maarseveen): The transition from artisanal to industrial production is an important step in economic development, but the impact on the artisanal workers remains poorly understood. In the latter half of the 19th century, technological advances in Swedish iron production initiated a wave of industrialization that caused artisanal finery forges and blast furnaces to close down as production moved to large-scale ironworks. Using linked census data and a unique dataset covering the universe of iron producers between 1860 and 1890, we investigate the effect of the site closures on worker outcomes. We find that workers displaced by the industrial transformation became 23 percentage points more likely to exit the iron industry, 25 percentage points more likely to migrate to another parish, and experienced a 10 percent decline in earnings relative to other groups of workers. While we find that the transition from artisanal to industrial production had persistent adverse consequences for workers, these effects do not appear to carry over to the next generation. To our knowledge, this paper is the first to quantify the effects of worker displacement during the second industrial revolution.