The Shadow of Slavery on Industrial Innovation: Evidence from the US South

Abstract

This study explores the imprint of American slavery on industrial innovation. We hypothesize that historical slave concentration hindered innovation activity through post-Reconstruction policies, which created labor market conditions facilitating unskill-biased technical change. County-level evidence from patent data substantiates this argument. Higher prevalence of slavery in 1860 was followed by a relative decline in patents, where this relationship became evident only after Reconstruction. The reduction in innovation was more pronounced in low-skill industries, which were better suited to unskill-biased technical change. Moreover, evidence shows that skill demands in the industrial sector decreased with historical slave concentration after Reconstruction, which corroborates the impact of slavery on the shift of production technology. Contrary to the marked influence of slavery on industrial innovation, we do not find a comparable pattern in agriculture that had long been dependent on slave labor.