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Ethnic Capital and Sub-national Development: Armenian and Greek Legacy in Post-Expulsion Turkey∗

Cemal Eren Arbatli Gunes Gokmen

This paper studies the long-run economic legacy of highly-skilled minorities and the channels of persistence, long after those minorities are expelled en masse. We offer evidence that the centuries-long presence of the two largest non-Muslim minorities of the Ottoman Empire, Armenians and Greeks, has significantly shaped the regional patterns of Turkish development. In particular, we find that, in modern day Turkey, districts with greater presence of historical Armenians and Greeks about a century ago are more densely populated, more urbanized, and more developed today. Using a large sample of villages and neighborhoods in Turkey we also establish a strong legacy of minority settlements on the current distribution of night lights at a highly local level. The estimates are sizable and very unlikely to be driven by endogenous selection.

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