The Distributional Consequences of Trade: Evidence from the Repeal of the Corn Laws: Stephan Heblich

Abstract: We provide new theory and evidence on the distributional consequences of trade using the 1846 Repeal of the Corn Laws. This large-scale trade liberalization opened domestic markets to the “grain invasion” from the new world that occurred as a result of late-19th century improvements in transport technology. We make use of a newly-created, spatially-disaggregated dataset on population, employment by sector, rateable values (land and property values), and poor law (welfare transfers) disbursement for around 11,000 parishes in England and Wales from 1801–1911. We show that the repeal of the Corn Laws led to rural outmigration, increased urbanization, structural transformation away from agriculture, increases in rural poverty, and sizable changes in property values. We show that a quantitative spatial model is successful in accounting for these empirical findings, with our estimates implying substantial labor mobility. We find that the aggregate welfare gains from the Repeal of the Corn Laws entailed considerable income redistribution, not only across sectors and factors, but also across geographical regions.

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