This talk examines the long-run economic impact of Czechoslovakia's expulsion of 3 million Germans in 1945. For identification, Testa uses the discontinuity in exposure to the expulsion at the former German-Czech "language border," which emerged out of early 20th century nationalism and was made formal with the Munich Agreement in 1938, yet around which relevant factors remained similar. The expulsion produced differences in population density, unemployment, sector composition, and educational attainment between municipalities only a few miles apart, which persisted 70 years later. Hence, expulsion can affect not only expellees but also long-run outcomes in the origin economy, even when expelled populations have similar economic characteristics to the remaining population. Testa provides evidence for three forces driving this divergence: local institutional and social decline, agglomeration economies, and endogenous human capital inequalities. 


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