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Herod's slaughter never happened. Matthew wasn't using the slaughter in a historical sense, but in a typological sense. It was a fictional event used to draw an allusion to the slaughter in Jeremiah.
There were a couple of other "events" in The Bible that never happened either. The Deluge was one of them (actually the Epic of Gilgamesh) and the Exodus was another, because there never was an Egyptian captivity period. No captivity, ergo no Exodus.
Archaeologists have uncovered similar-but-not-exact account of not Hebrews but Hyksos in ancient Egyptian record, and the Hyksos were lepers that weren't so much in captivity as they were quarrantined. Then they got out and ran the place for a while before getting kicked out of Egypt altogether.
