Post-1500 Population Flows and The Long-Run Determinants of Economic Growth and Inequality

Abstract

We construct a matrix showing the share of the year 2000 population in every country that is descended from people in different source countries in the year 1500. Using the matrix to adjust indicators of early development so they reflect the history of a population's ancestors rather than the history of the place they live today greatly improves the ability of those indicators to predict current GDP. The variance of early development history of a country's inhabitants is a good predictor for current inequality, with ethnic groups originating in regions having longer histories of organized states tending to be at the upper end of a country's income distribution.