The Legacy of Forced Assimilation Policies: Entry Barriers in the Labor Market and Anti-German Sentiments in South Tyrol

We study the institutional determinants of ethnic conflict by exploiting a unique historical setting originated from a failed forced assimilation program, the Italianization of South Tyrol. The program imposed entry barriers, for non-Italian speakers, in the labor market for public servants. The specialization of the Italians continued until 1966 when it was put in discussion by the announcement of a reform. After 1966, we document an increase in anti-German sentiments where specialization in the public sector was more pronounced. Our results indicate that deep-rooted inter-ethnic tensions are likely to revive when historically-established economic rents of privileged ethnic groups are threatened.