The Long Run Effects of WWII Destruction on German Households

This paper presents causal evidence on the long run consequences of WWII destruction on educational attainment and health status of German households. I combine a unique dataset on WWII bombing intensity in Raumordnungsregionen (Regional Policy Regions) level with the individual survey data, German Socio-Economic Panel (GSOEP) to study the long-lasting effects of WWII devastation. The identification strategy exploits exogenous variation in the intensity of WWII destruction across regions and across birth cohorts. I show that Allied Air Forces bombing during WWII had a detrimental effect on years of schooling and health outcomes such as height and health satisfaction, even 40 years after the war. Additional analysis also suggests that inter-generational transfers are prominent in determining one’s education and the negative impact of war destruction is mitigated through parental human capital endowment. These results survive after alternative sample specifications and estimation strategies and are not driven by individual or regional omitted variables. My findings suggest that, consequences of wars along human dimensions could be more substantial and longer lasting than any physical capital impacts. JEL Codes: N34, N44, J24