What doesn’t kill you makes you stronger? \ud The Impact of the 1918 Spanish Flu Epidemic on Economic Performance in Sweden

摘要

We study the impact of the 1918 influenza pandemic on economic performance in Sweden. The\udpandemic was one of the severest and deadliest pandemics in human history, but it has hitherto\udreceived only scant attention in the economic literature – despite important implications for\udmodern-day pandemics. In this paper, we exploit seemingly exogenous variation in incidence\udrates between Swedish regions to estimate the impact of the pandemic. Using difference-in-differences and high-quality administrative data from Sweden, we estimate the effects on\udearnings, capital returns and poverty. We find that the pandemic led to a significant increase\udin poverty rates. There is also relatively strong evidence that capital returns were negatively\udaffected by the pandemic. On the other hand, we find robust evidence that the influenza had\udno discernible effect on earnings. This finding is surprising since it goes against most previous\udempirical studies as well as theoretical predictions.