Old Times, Better Times? German Miners’ Knappschaften, Pay-as-you-go Pensions, and Implicit Rates of Return, 1854–1913

This paper contributes to the literature on the weakness of modern pay-as-you-go social security systems in financing pensions by taking a business and economic historical perspective on the issue. It focuses on Prussian Knappschaften (plural of Knappschaft), which provided miners with compulsory invalidity and implicit old-age insurance, and studies the period from 1854 to 1913. Knappschaften used the pay-as-you-go mechanism, and, in the long-term, came under financial pressure by the rising number of pensioners. The question to be answered is whether Knappschaften were able to off er cohorts of miners entering the system at diff erent times the same implicit rates of return. Did Knappschaften provide an intergenerationally sustainable policy, or did adjustments of contributions and other parameters decrease the dividend for insured miners over time?Insurance; implicit rates of return; Knappschaft; mining; pay-as-you-go; pensions; Prussia; welfare state

On the historical roots of the modern welfare state: the Knappschaft statistics of 1861 to 1920 as a source for quantitative historical social research

"This article introduces the Knappschaft statistics as a basic source for quantitative data on a very important topic in historical social research, namely the rise of the welfare state. Scholars who seek to embark upon historical social research in that direction require both qualitative and quantitative data. Exploring data sources and making data available for general use thus is crucial to systematic research and scholarly discourse. For the period 1861 to 1920, the Knappschaft statistics document the operation of the various German Knappschaftsvereine as the carriers of miners' occupational social insurance at the time. Data on the various Knappschaften are quite rich enabling us to use them as a 'historical laboratory' not merely to study the welfare positions of and social relations in a particular societal class in a particular period, but to explore more general questions related to the roots of modern welfare states, their functioning, and the challenges they face. To stress this point, the author combines the concise overview of the Knappschaft statistics with a straightforward application to the question of the consequences of aging in a pay-as-you-go pension system." (author's abstract

How Political Were Airbus and Boeing Sales in the 1970s and 1980s?

When, in the second half of the 1960s, governments and aircraft manufacturers in Western Europe discussed a possible joint project called “Airbus”, the markets for civil jet aircraft were dominated by two US firms, Boeing and McDonnell Douglas. After a disappointing start, Airbus Industrie, founded in 1970, had become a serious competitor only a decade later. Since the early 2000s, Airbus and Boeing have been competing head-to-head for market leadership for jet aircraft with more than 100 seats. Boeing has persistently complained about Airbus receiving loans on favourable terms and other subsidies from European governments, and that the latter would use political pressure to make operators buy Airbus aircraft. Based on a record of all wide-body jets delivered between 1969 and 1989 and a dataset built thereupon on all airlines having acquired a brand-new wide-body, we subject the latter reproach to an empirical test by asking for the political determinants of Airbus and Boeing sales. We find suggestive evidence for airlines’ ownership status and their home countries’ former colonial ties to as well as trade relations with and development aid flows from the Airbus consortium member countries and the US to have mattered

Civil Aircraft Procurement and Colonial Ties: Evidence on the market for jetliners, 1952-1989

We investigate the extent to which (quasi-)colonial ties played a role in the procurement of jet aircraft by airlines in the Global South. Because we do not have access to archival data on the sensitive issue of aircraft procurement, we take an indirect empirical approach. Our investigation is based on a dataset including all Western jet aircraft delivered between 1952 and 1989. We ask if, to what extent and how long airlines from former British, French, Dutch, and US (quasi-)colonies tended to buy jets from their former or, respectively, most recent colonial master. We compare the (ex-ante) expected geographical distribution of politically unbiased jet deliveries to the (ex post) actual historical and potentially biased distribution. We find that colonial ties to former colonial masters from Europe especially mattered until the early/mid 1970s when, triggered by the two oil price crises, pure economic motives gained more significance in informing procurement decisions

How Technologically Progressive Was Germany in the Interwar Period? Evidence on Total Factor Productivity in Coal Mining

The discussion of the rationalization wave in German industry (1924-1929) still lacks proper industry-level estimates of the rate of technological progress. To close part of this gap, this article investigates total factor productivity (TFP) growth in hard coal mining over the extended period 1913-1938. Stochastic Frontier Analysis is applied to a sample of firms from the Ruhr coal district. TFP grew positively overall and specifically from 1924-1929. Surprisingly, however, TFP growth was even faster from 1933-1938, suggesting that the Nazi economy heavily capitalized on the Weimar rationalization movement, the effects of which are usually not traced beyond 1932

Did closures do any good? Labour productivity, mine dynamics, and rationalization in interwar Ruhr coal mining

Throughout the late 1920s, German coal mining saw an exceptional surge in labour productivity, led by the performance of the Ruhr coal mines. It is commonly accepted in the relevant literature that the economy-wide 'rationalization boom' explains that pattern. This study tests the related hypothesis that 'negative rationalization', in the form of a massive wave of mine closures over the period 1924-9, played a significant role in stimulating aggregate labour productivity in the Ruhr coal district. Using an original dataset for the totality of Ruhr coal mines, the causes of productivity change over the broader period 1913-38 are identified, using the decomposition method of Foster, Haltiwanger, and Krizan. Results suggest that labour productivity was driven largely by improvements at individual mines, attributable to the intensified mechanization of underground operations. In sharp contrast, turnover effects were marginal, overall, compared to the effects stemming from the producer dynamics among surviving mines. Thus, the practical productivity implications ofmine closures during the rationalization boom are negligible and overrated in the literature. These findings indicate the necessity of testing the relative importance of 'negative rationalization' in the form of plant closures in other branches of the Weimar economy

The determinants of sovereign bond liquidity during WWI

What was WWI's impact on securities markets' liquidity? Investigated is the cross-section of sovereign bonds traded in Amsterdam. Prime determinants of a bond's wartime liquidity are its pre-war liquidity, above-median age, on-the-run status, and link to a minor war party. (c) 2020 Elsevier B.V. All rights reserved

A Happiness Economics-Based Human Development Index for Germany (1920-1960)

The United Nations’ Human Development Index (HDI) has become an important tool for measuring and comparing living standards between countries and regions. However, the HDI has also attracted a fair share of conceptual criticism. Starting from Andrea Wagner’s historical estimations of a HDI for Germany in the interwar and early post-war period, we take up part of that criticism by implementing three essential modifications to the mode of calculation. We test how far they alter our picture of the relative living standard in the Weimar Republic, the Third Reich, and the Federal Republic of Germany. First, we replace the arithmetic mean by the geometric mean, which is said to solve the problem of perfect substitutability; second, we extend the HDI by an additional fourth dimension measuring economic and political freedom – an important, though neglected, dimension; and third, as the perhaps most crucial conceptual intervention, we develop weighting schemes for the partial indices that are theoretically backed by happiness economic research. Thus, we challenge the common, but arbitrary fundamental assumption that all partial indices receive equal weights. Our results show that the HDI for Germany reacts very sensitively to conceptual interventions, making it difficult to use it for the intertemporal and international comparison of living standards. We also find that the proposed modified HDIs allow for a re-evaluation of the living standard in interwar Germany; and in contrast to what the reference estimations on the HDI for Germany say, there is a profound discontinuity between the Third Reich and post-war Germany in terms of living standards

War, Coal, and Forced Labor: Assessing the Impact of Prisoner-of-War Employment on Coal Mine Productivity in World War I Germany

This paper assesses the causal relationship between POW assignments and labor productivity for a vital sector of the German World War I economy, namely coal mining. Prisoners of war (POWs) provided significant labor. Combining data on all Ruhr mines with a treatment-effects approach, I find that POW employment alone accounted for 36 percent of the average POW-employing mine's annual productivity decline over wartime. Estimates also suggest that the representative POW's productivity averaged 32 percent of the representative regular miner's productivity and that POWs' contribution to wartime coal output amounted to 3.9 percent. Violence did not serve as a powerful work incentive