Tuesday Oct. 18th 4pm E-530 Dealy Please join us as Yale Professor Michael Peters examines the development impacts of one of the 20th Century’s largest population transfers. A preliminary draft of this paper is available here. After WWII more than 8 million Germans were were transferred to Western Germany from the Eastern provinces. Data from the 1960s and 70s shows that East German refugees experienced substantial reallocation into unskilled occupations. This illustrates how firms respond to large changes in labor supply. “In the short-run, falling wages induce firms to substitute towards the abundant factor. In the long-run however, firms’ labor demand will depend on their technological adoption decisions. If firms’ technological choices are affected by the labor supply they face, labor supply shifts will induce movements in aggregate labor demand… this reasoning is at the heart of the literature on endogenous technological bias (Acemoglu, 2007).” This paper exploits a large labor supply shock to test for this sort of endogenous technological change…