Persistence of Population Shocks: Evidence from the Occupation of West Germany after World War II

In the immediate aftermath of World War II, millions of German expellees were resettled into the new borders of Germany, but not into the parts of Germany that were occupied by France. Using a spatial regression discontinuity framework, I estimate the persistence of the population shock over a 20-year-period. Between 1945 and 1950, the inflow of people increased the population in municipalities where expellees could settle by 21.6 percent. The difference in population levels is highly persistent and remained 17.8 percent in 1970. The results suggest that population patterns in the region that I study were not determined by locational fundamentals.