Study Shows Modern-Day Economic Impacts from 16th-Century Mexican Epidemics

OSU Applied Economics Department Head Jennifer Alix-Garcia, along with Emily Sellars from Yale University, recently published “Labor scarcity, land tenure, and historical legacy: Evidence from Mexico” in the Journal of Development Economics. The authors examine the long-term impact of Mexico’s 16th century demographic collapse on landholding patterns through the present day. The collapse, mostly caused by severe epidemics introduced during colonial rule and which reduced the indigenous population by between 70 and 90 percent and differed in severity across space, facilitated land concentration and the rise of a landowner class that dominated Mexican political economy for centuries.   Though landholding patterns were transformed following the Revolution of 1910, Alix-Garcia and Sellars show that the disease-impacted areas now have more land in common-property institutions with limited property rights. Therefore, this 16th century population collapse has had a persistent impact on the Mexican political economy. In fact, the concentration of land and power by elites following the collapse in Mexico set the country on a trajectory of long-term inequality. The authors illustrate the importance of political and economic context in determining the short- and long-term consequences of demographic shocks. While shocks on this level are rare, these findings can help us to understand the institutional aftermath of epidemics and civil conflict, which may also produce a concentrated and sharp decline in local populations.