Unequal Burden: Colonial Taxation and Living Standard Disparities Within Minorities

Abstract

European colonialism in the Americas entailed a host of ethnically targeted exactions. Yet, this burden was unequally distributed within indigenous communities themselves. Exploiting across and within-country variation, I argue that areas with more regressive colonial taxation (i.e. Peru, Bolivia) there was more socioeconomic sorting at the time, namely, the selective "exit" via lower fertility, higher mortality and (or) more out-migration of low-status indigenous populations. Thus changing the long-run social composition and living standards of remaining communities. Indeed, current surname data in Peru reveals a higher prevalence of Inca nobility surnames and higher living standards among communities more historically exposed to regressive taxation. This pattern is not new, as already in the 19th century these communities exhibit relatively higher literacy rates and propensity for collective action. In contrast, no similar pattern emerges for Guatemala, a case of more progressive colonial taxation. These findings highlight indigenous socioeconomic sorting as an overlooked consequence of Spanish colonization in the Americas.