New Study Reveals Economic Impacts of Ending American Slavery

A recent analysis by economists from the National Bureau of Economic Research (NBER) offers a detailed examination of the economic landscape of the United States in 1860, had slavery not existed. The study, conducted by researchers Treb Allen, Winston Chen, and Suresh Naidu, utilizes new micro-data to highlight the significant correlations between the locations of free and enslaved workers and various geographic factors such as agricultural productivity, disease prevalence, and the likelihood of slave escape.

The researchers developed a quantitative spatial model that illustrates how slaveholders coerced enslaved individuals into maximizing labor output. This coercion allowed slaveholders to reap the benefits of their labor while directing enslaved workers to sectors that prioritized owner profits over the welfare of the workers themselves. This model serves as a foundation for understanding the broader implications of emancipation on the U.S. economy.

Economic Gains from Emancipation

The findings of the study reveal that dismantling the institution of slavery would have led to substantial economic transformations. The analysis estimates that the welfare of formerly enslaved individuals would have increased by approximately 1,200% post-emancipation. In contrast, the welfare of free workers would have experienced a slight decline of 0.7%, while slaveholder profits would have entirely disappeared.

Overall, the study suggests that the aggregate Gross Domestic Product (GDP) of the United States would have risen by 9.1% as a result of emancipation. While agricultural productivity would have contracted, this decline would have been offset by significant growth in manufacturing and services. The shift in workforce dynamics, with many formerly enslaved individuals transitioning from agriculture to employment in the U.S. North, is a key driver of this economic expansion.

Implications for Understanding American History

This research not only sheds light on the economic ramifications of slavery but also challenges the historical narratives surrounding the antebellum economy. By providing detailed quantitative evidence, the study encourages a reevaluation of how slavery shaped economic structures and labor markets in the United States.

The insights derived from this NBER working paper contribute to a deeper understanding of the historical economic landscape and pave the way for further studies on the long-term effects of slavery on American society. As the discourse surrounding race and economics continues, the findings highlight the profound and lasting impacts of systemic injustice on economic outcomes.

The complete study is accessible through the NBER, providing an essential resource for those interested in the intersections of economics, history, and social justice.