Agricultural productivity and economic development: the contribution of clover to structural transformation in Denmark

This paper contributes to the debate on the impact of agricultural productivity on long run economic development. It presents evidence that widespread adoption of clover contributed to local economic development based on a panel of 56 Danish market towns. We adopt a differences-in-differences approach augmented by an instrumental variable and find that the adoption of clover accounts for about 8 percent of the growth in market town population from 1672 to 1901. The analysis suggests that the effect of the adoption of clover on the process of development was mediated by its impact on human capital formation.