Sprouting Cities: How Rural America Industrialized
We study the joint process of urbanization and industrialization in the US economy between 1880 and 1940. We show that only a small share of aggregate industrialization is accounted for by the relocation of workers from remote rural areas to industrial hubs like Chicago or New York City. Instead, most sectoral shifts occurred within rural counties, dramatically transforming their sectoral structure. Most industrialization within counties occurred through the emergence of new "factory" cities with notably higher manufacturing shares rather than the expansion of incumbent cities. In contrast, today's shift towards services seems to benefit large incumbent cities the most.
This paper was prepared for the AEA Papers and Proceedings, 2023. We thank Ken Kikkawa for a very helpful discussion at the 2023 AEA Meetings. We also thank Dávid Nagy for comments that improved the paper. An earlier version of this paper was presented as “Little Chicagos: The Industrialization of Rural America, 1880-1940.” The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.