Research Highlights Article
February 5, 2025
The Gulags and the intelligentsia
How forced relocation of Soviet intellectuals shaped Russia's economic geography.
Gulag prisoners in Perm
Source: Mikhail Sokolov
During Stalin’s reign, the Soviet Union forcibly sent millions of educated citizens, labeled “enemies of the people,” to labor camps across its vast territory. While studying this dark chapter of Russia’s history, two economists, Gerhard Toews and Pierre-Louis Vézina, discovered an unexpected pattern: areas around camps that held more of these educated prisoners are significantly more prosperous today.
In their paper in the American Economic Journal: Macroeconomics, the pair provide compelling evidence for how human capital—people's education and skills—can create lasting economic advantages that persist across generations.
“We started looking at the Gulag system, thinking it would help explain corruption and underdevelopment in the region,” Vézina told the AEA in an interview. “But we found the opposite—there were positive outcomes associated with camp locations. When we dug deeper into the history and data, we discovered that these outcomes were linked to the concentration of educated 'enemies' in certain camps.”
The story has personal significance for the researchers. Toews’ own family, ethnic Germans from Russia, were among those sent to camps in Kazakhstan. This connection helped drive their decade-long investigation into how this tragic episode in Soviet history shaped long-term economic development.
The Gulag over time
The chart below shows the number of Gulag camps (solid green line) and the total number of prisoners (black dashed line). The two vertical dashed lines indicate the years that can define the start and end of the Gulag, starting with Stalin’s five-year plan in 1928 and ending with Stalin’s death in 1953. The shaded areas show specific periods of marked change for the Gulag.
To conduct their analysis, the researchers needed two key pieces of data. First, they gained access to Soviet archive microfilms documenting the composition of prisoners at different camps.
“The Soviets were really good at documenting things because they were a planned economy,” notes Vézina. “They wanted data on everything.” This allowed the authors to identify which camps held higher proportions of educated prisoners.
Second, they obtained detailed modern data on Russian firms, including wages, profits, and employee education levels. By combining these datasets, they were able to compare economic outcomes today among areas near camps that held different proportions of educated prisoners.
A crucial question was whether the distribution of educated prisoners across camps was random enough to serve as a natural experiment, allowing the researchers to isolate the impact of educated people. Through extensive historical research, they found no evidence that Soviet planners strategically allocated educated prisoners to certain camps.
“It was all about political objectives rather than economic objectives,” explains Vézina. "They wanted to get rid of that threat to the regime. They didn't have industrialization or economic objectives when they sent them."
The impact that educated political prisoners had on future economic outcomes was striking. Areas around camps that held more “enemies of the people,” wages today are 22 percent higher, corporate profits per employee are 14 percent higher, and economic activity—as measured by nighttime light intensity—is 46 percent higher. The researchers also found that modern residents near these camps are more likely to be descendants of political prisoners and have higher education levels themselves.
Educated people are better at using management techniques and technologies. And they complement other employees and help transfer knowledge within firms and cities, so these human capital externalities emerge over time.
Pierre-Louis Vézina
Why did the education level of people in the camps make such a difference for long-term development? While the authors’ paper doesn't directly examine the mechanism, Vézina points to several factors. “Educated people are better at using management techniques and technologies. And they complement other employees and help transfer knowledge within firms and cities, so these human capital externalities emerge over time.”
The findings provide unusually clean evidence that concentrations of human capital can create long-term advantages for regions, shaping development for many generations.
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“Enemies of the People” appears in the January 2024 issue of the American Economic Journal: Macroeconomics.