Are the costs of discrimination mainly borne by the targeted group or by society? This paper examines both individual and aggregate costs of ethnic discrimination. Studying Germans living in the U.S. during World War I, an event that abruptly downgraded their previously high social standing, we propose a novel measure of local anti-German sentiment based on war casualties. We show that Germans disproportionately fled counties with high casualty rates and that those counties saw more anti-German slurs reported in newspapers. German movers had worse occupational outcomes after the war but also the discriminating communities paid a substantial cost. Counties with larger outflows of Germans, who pre-war tended to be well-trained manufacturing workers, saw a drop in average annual manufacturing wages of 1-7% which persisted until 1940. Thus, for discriminating communities, a few years of intense anti-German sentiment were reflected in worse economic outcomes that lasted for more than a decade.

The Great Migration has been used to explain black economic progress at mid-century. However, also southern blacks made significant economic gains as they entered much better paying semi-skilled jobs for the first time which notably improved their economic standing. Using newly digitized military data, I show that counties with higher World War II casualty rates among semi-skilled whites saw a significant increase in the share of blacks in semi-skilled jobs. These deaths opened employment opportunities for blacks from which they were previously barred due to racist concerns and they can explain up to 75% of the shift of Southern blacks from the farms to the factories. I provide evidence that the casualty-induced labor shortages broke down racial barriers to entry, leading to a positive selection of black workers into semi-skilled employment which they could have profitably filled already before the war in the absence of such barriers.

We estimate the causal effect of losing a father in the U.S. Civil War on children’s long-run socioeconomic outcomes. Linking military records from the 2.2 million Union Army soldiers with the 1860 U.S. population Census, we track soldiers’ sons into adulthood. Sons of soldiers who died had a lower a occupational income score in 1880 and were less likely to have a high- or semi-skilled job as opposed to being low-skilled or farmers. Our results are robust to instrumenting paternal death with the mortality rate of the father’s regiment. Effects are largely driven by the increased downward mobility of the sons of semi-skilled fathers, who were more likely to become low-skilled as a result of paternal death. Pre-war family wealth is a strong mitigating factor: there is no effect of losing a father in the top quartile of the wealth distribution.

We study the effect of warfare on the development of state capacity and representative institutions using novel data on cities and territories in the German lands between 1200 and 1750. More specifically, we show that cities with a higher conflict exposure establish more sophisticated tax systems, but also develop larger councils, councils that are more likely to be elected by citizens, and more likely to be independent of other local institutions. These results are consistent with the idea of a trade-off between more efficient taxation and power sharing proposed in earlier work. We make headway on establishing a causal role of wars by using changes to German nobles’ positions within the European nobility network to instrument for conflict.