The Long Shadow of History? The Impact of Colonial Labor Institutions on Economic Development in Peru

Abstract How long is the shadow of history in explaining economic outcomes? We examine a canonical case of forced labor: the mita and the encomienda in colonial Peru. The mita was a labor draft designed to provide workers for mines, churches, and public works in colonial Peru and Bolivia. The encomienda granted Spanish conquistadores the right to extract resources from indigenous peoples. We examine the impact of forced labor using a dataset of 500 indigenous settlements scattered across modern-day Peru. We find that forced labor gravely impacted the Peruvian communities subjected to it, but the effects dissipated before the end of the colonial period (1532-1811). We test for a possible "reversal of fortune" in the postcolonial period by looking at education and access to land for the 19th and 20th centuries and find no significant differences. The results hold when we examine the mita and encomienda separately. While forced labor mattered, its effects did not persist. It appears the shadow of history was not that long after all.