Working Paper No. 10-04
The Economic Geography of Race in the New World:
This paper examines the economic factors behind the geography of race in the Americas. It hopes to resolve the apparent paradox that many areas once occupied by Natives are now inhabited by peoples of predominantly European and African descent. A simple model is presented in which the racial composition of the labor force depends on the feasibility of slavery (factor endowments) and the relative cost of Native and African slaves (a function of the ratio of the distance to the frontier to the slave ports in Africa). The predictions of the model are tested using a newly-created database on the racial composition of twenty Brazilian states from 1500 to 2000. The (inverse) labor cost ratio is found to be positively related to the ratio of Africans to Natives, controlling for factor endowments. The results suggest that for the average state, a 1% increase in the cost of Native labor (a 4.6 km shift in the frontier) corresponded to a 2.6% increase in the ratio of Africans to Natives (an additional 18,114 Africans), all else equal.
Keywords: Colonization, Race, Economic Development, Native Americans, Ethnic Diversity, Inequality, Economic Geography, Historical Demography, Institutions, Brazil