Enduring Effects of Displacement: How WWII Continues to Shape Polish Politics

How do migration and cultural diversity affect economic and social outcomes in the long run? After WWII, the Polish borders shifted westward, and six million people were repatriated and resettled from Western Europe, pre-WWII Polish territories, and Central Poland into the territories freed from the German population. The Polish population transfers were not unlike a natural experiment due to the arbitrary assignment procedure adopted by the Communist authorities. I leverage a diverse set of data, including a unique historical dataset on the origin of migrants in 1,282 resettled municipalities, to investigate the long-run effects of the displacement. Contrary to a large body of scholarship in political science and economics, I find that income is higher in culturally diverse municipalities today. I argue that this counterintuitive result can be explained by the differences in the nature of social capital in diverse and homogenous municipalities. I demonstrate that displacement has fundamentally transformed the structure of social relations at the local level and that this change had far-reaching economic and social implications half a century later.