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Railroads and the Rise of the Factory: Evidence for the United States, 1850-70

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  • Jeremy Atack
  • Michael R. Haines
  • Robert A. Margo

Abstract

Over the course of the nineteenth century manufacturing in the United States shifted from artisan shop to factory production. At the same time United States experienced a "transportation revolution", a key component of which was the building of extensive railroad network. Using a newly created data set of manufacturing establishments linked to county level data on rail access from 1850-70, we ask whether the coming of the railroad increased establishment size in manufacturing. Difference-in-difference and instrument variable estimates suggest that the railroad had a positive effect on factory status. In other words, Adam Smith was right -- the division of labor in nineteenth century American manufacturing was limited by the extent of the market.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14410.

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Date of creation: Oct 2008
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Publication status: published as “Railroads and the Rise of the Factory: Evidence for the United States, 1850 - 1870,” (with Haines and Margo ) in P a ul Rhode, J oshua Rosenbloom, and D avid Weiman, ( eds. ) Economic Evolution and Revolutions in Historical Time . Palo Alto, CA: Stanford University Press, (2011): 162 - 179 .
Handle: RePEc:nbr:nberwo:14410

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  1. Michael R. Haines & Robert A. Margo, 2006. "Railroads and Local Economic Development: The United States in the 1850s," NBER Working Papers 12381, National Bureau of Economic Research, Inc.
  2. Atack, Jeremy & Bateman, Fred & Margo, Robert A., 2008. "Steam power, establishment size, and labor productivity growth in nineteenth century American manufacturing," Explorations in Economic History, Elsevier, vol. 45(2), pages 185-198, April.
  3. Peter L. Rousseau & Richard Sylla, 2000. "Emerging Financial Markets and Early U.S. Growth," Econometric Society World Congress 2000 Contributed Papers 1254, Econometric Society.
  4. Goldin, Claudia & Sokoloff, Kenneth, 1982. "Women, Children, and Industrialization in the Early Republic: Evidence from the Manufacturing Censuses," Scholarly Articles 2664292, Harvard University Department of Economics.
  5. Broadberry, Stephen N. & Irwin, Douglas A., 2006. "Labor productivity in the United States and the United Kingdom during the nineteenth century," Explorations in Economic History, Elsevier, vol. 43(2), pages 257-279, April.
  6. Bresnahan, T.F & Reiss, P.C., 1989. "Entry And Competition In Concentrated Markets," Papers 151, Stanford - Studies in Industry Economics.
  7. Eric Hilt, 2007. "When did Ownership Separate from Control? Corporate Governance in the Early Nineteenth Century," NBER Working Papers 13093, National Bureau of Economic Research, Inc.
  8. Craig, Lee A & Palmquist, Raymond B & Weiss, Thomas, 1998. "Transportation Improvements and Land Values in the Antebellum United States: A Hedonic Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 16(2), pages 173-89, March.
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Cited by:
  1. Nicolas Ziebarth, 2013. "Are China and India Backwards? Evidence from the 19th Century U.S. Census of Manufactures," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 86-99, January.
  2. Nicolas Ziebarth, 2011. "Are China and India Backwards? Evidence from the 19th Century U.S. Census of Manufactures," 2011 Meeting Papers 138, Society for Economic Dynamics.
  3. Jeremy Atack & Matthew S. Jaremski & Peter L. Rousseau, 2014. "Did Railroads Make Antebellum U.S. Banks More Sound?," NBER Working Papers 20032, National Bureau of Economic Research, Inc.
  4. Alex Trew, 2014. "Spatial Takeoff in the First Industrial Revolution," Discussion Paper Series, Department of Economics 201401, Department of Economics, University of St. Andrews, revised 01 Jan 2014.
  5. Robert A. Margo, 2013. "Economies of Scale in Nineteenth Century American Manufacturing Revisited: A Resolution of the Entrepreneurial Labor Input Problem," NBER Working Papers 19147, National Bureau of Economic Research, Inc.
  6. Philipp Ager & Markus Bruckner, 2011. "Cultural Diversity and Economic Growth: Evidence from the US during the Age of Mass Migration," School of Economics Working Papers 2011-02, University of Adelaide, School of Economics.
  7. Erik Hornung, 2012. "Railroads and Micro-regional Growth in Prussia," Ifo Working Paper Series Ifo Working Paper No. 127, Ifo Institute for Economic Research at the University of Munich.
  8. Alex Trew, 2008. "Infrastructure Finance and Industrial Takeoff in the United Kingdom," CDMA Working Paper Series 200809, Centre for Dynamic Macroeconomic Analysis.
  9. Thor Berger & Kerstin Enflo, 2013. "Locomotives of Local Growth: The Short- and Long-Term Impact of Railroads in Sweden," Working Papers 0042, European Historical Economics Society (EHES).
  10. Guajardo, Guillermo, 2009. "Between the Workshop and the State: Training Human Capital in Railroad Companies in Mexico and Chile, 1850-1930," MPRA Paper 16135, University Library of Munich, Germany.
  11. Dave Donaldson, 2011. "Railroads of the Raj: estimating the impact of transportation infrastructure," LSE Research Online Documents on Economics 38368, London School of Economics and Political Science, LSE Library.
  12. repec:cge:warwcg:79 is not listed on IDEAS

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