Abstract
As economies develop, the share of employment in agriculture falls, the share in services increases, while the share of manufacturing follows an inverted U shape: increasing for lower levels of development, decreasing for higher levels. In this project, I study how export booms shape the process of structural transformation of developing economies during the early stages of development. In particular, increases in agricultural income may lead to further specialization on agriculture or, on the contrary, create spillovers to the manufacturing sector via demand-driven channels. I study Colombia’s exposure to a coffee boom from 1908 to 1938, using historical data at the municipality level from the country’s first manufacturing census (1945), first coffee producer’s census (1928), and population census (1912, 1918, 1938). I compare the growth of the manufacturing sector between coffee-producing municipalities and the rest. To deal with omitted variables related with both coffee production and manufacturing development, I exploit the optimal growing climate for coffee, between 59°F and 78°F, which translates to 1,300 and 7,900 feet over sea level in Colombia, where weather is determined by altitude. I implement a fuzzy regression discontinuity design and find that municipalities that were not exposed directly to the coffee export boom had a higher share of the population employed in manufacturing in 1945 with respect to coffee producing municipalities, despite no pre-existing differences in 1912.
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I’m an Economics PhD candidate at the University of Maryland, College Park. My research interests are in Economic History, Political Economy, and Development Economics. I was born and raised in Medellín (Colombia). Before starting at U. of Maryland, I earned a BA in Economics at Universidad EAFIT.
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