May 11, 2016

Jewish Communities and City Growth in Preindustrial Europe

  • Mark Koyama

    Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics
  • Noel D. Johnson

    Senior Research Fellow
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Find the paper at SSRN

We study whether cities with Jewish communities grew faster than cities without Jewish communities in Europe between 1400 and 1850. We match data on city populations from Bairoch (1988) with data on the presence of a Jewish community from the Encyclopedia Judaica. Our difference-in-differences results indicate that cities with Jewish communities grew about 30% faster than comparable cities without Jewish communities between 1400 and 1850. To establish causality, we create time varying instrumental variables which rely only on the spatially extended network of Jewish communities in order to predict Jewish presence in a given city. We also provide evidence that the advantage of cities with Jewish communities stemmed in part from Jewish Emancipation and their ability to exploit increases in market access after 1600.