Persistent Specialization and Growth:The Italian Land Reform

Land distribution has ambiguous effects on structural transformation: large landowners can slow industrialization by limiting the provision of education, but larger scale andlocal market power might accelerate the mechanization of production. We examine theeffects of redistribution following the Italian 1950 land reform and find that redistribution led to less industrialization. We explain this finding with a reduction in the scale ofoperations and a more intensive use of family labor. Agricultural specialization persistedfor at least 50 years, consistent with models of occupational inheritance. Finally, we showthat expropriated areas had lower growth during 1970-2000