This article documents the impact of the Brazilian railway network on technology adoption in the textile sector between the middle nineteenth and twentieth century. I exploit variation induced by geographic location, where municipalities near the least-cost routes were more likely to be connected to the railway system, to identify the effects of railroads on mechanized cotton spinning capacity. I show that the expansion of railways increased the adoption of new technologies in the textile industry. This technological advance occurred because of the entry of new firms and the modernization of existing factories. I show that railroads built to export coffee connected the national industry to the modern overseas machinery market. Municipalities connected to the railway system imported more textile machines than those without railways. In the medium term, this technological catch-up resulted in the shift of workers from the agricultural sector to the industrial sector. Despite the closure of many railway stations after the 1950s, municipalities initially connected to the railroad system continue to have higher per capita income than the non-connected. Overall, the results show the importance of domestic trade costs to partly explain the slow diffusion of new technologies and industrialization to the peripheral countries between the XIX and XX centuries.
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This paper evaluates the health effects of a large-scale subsidizing program of prescription drugs introduced in Brazil, the Aqui Tem Farmácia Popular program (ATFP). We exploit features of the program to identify its effects on mortality and hospitalization rates by diabetes for individuals aged 40 years or more. We find weak evidence for a decline in mortality, but a robust reduction in hospitalization rates. According to our preferred specification, an additional ATFP pharmacy per 100,000 inhabitants is associated with a decrease in hospitalization rates by diabetes of 8.2, which corresponds to 3.6% of its baseline rate. Effects are larger for Type II diabetes in comparison to Type I, and among patients with relatively lower socioeconomic status. Overall, the results are consistent with insulin-dependent patients being relatively less responsive to subsidies because of higher immediate life-threatening risks; and with lower-SES individuals being more responsive because of liquidity constraints. These results support the view that the optimal design of health systems and cost-sharing mechanisms should take into account equity concerns, heterogeneous impacts by health condition, and their potential offsetting effects on the utilization of downstream health services.
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We study the relationship between the political power of agrarian elites in the early 20th century and the spread of mass schooling in Brazil. We use a novel dataset on the occupational structure of the voting elites, the identity of elected local politicians, and historical censuses to test whether the political power of agrarian elites explains differences in the expansion of mass schooling and patterns of structural transformation across municipalities. We find that the political power of agriculture elites in 1905 reduced investments in education and lower literacy rates for many decades. As a consequence of the educational backwardness, municipalities, where the agrarian elite had more political power, took longer to undergo structural transformation. Finally, we present evidence that improvements in education outcomes occurred only when elected politicians diversified from the original agricultural elites after the 1930s. [go to paper]