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The impact of the Civil War on capital intensity and labor productivity in southern manufacturing

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  • Hutchinson, William K.
  • Margo, Robert A.

Abstract

The Civil War resulted in a substantial divergence in the regional structure of factor prices. In particular, wages fell in the South relative to the non-South, but interest rates and other measures of the costs of capital increased. Using archival data for manufacturing establishments, we show that capital-output and capital-labor ratios in southern manufacturing declined relative to non-southern manufacturing after the War, precisely in the direction implied by the regional shifts in factor prices. Labor productivity in Southern manufacturing also declined, but this decline is explained by the reduction in capital intensity.
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  • Hutchinson, William K. & Margo, Robert A., 2006. "The impact of the Civil War on capital intensity and labor productivity in southern manufacturing," Explorations in Economic History, Elsevier, vol. 43(4), pages 689-704, October.
    • Handle: RePEc:eee:exehis:v:43:y:2006:i:4:p:689-704
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    Cited by:

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    2. Jeremy Atack & Fred Bateman & Robert A. Margo, 2005. "Capital deepening and the rise of the factory: the American experience during the nineteenth century," Economic History Review, Economic History Society, vol. 58(3), pages 586-595, August.
    3. Bertocchi, Graziella & Dimico, Arcangelo, 2012. "The racial gap in education and the legacy of slavery," Journal of Comparative Economics, Elsevier, vol. 40(4), pages 581-595.
    4. 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.
    5. Dempster, Gregory M. & Isaacs, Justin P., 2014. "Structural change in the U.S. economy: 1850–1900," Structural Change and Economic Dynamics, Elsevier, vol. 31(C), pages 112-123.
    6. James Feigenbaum & James Lee & Filippo Mezzanotti, 2022. "Capital Destruction and Economic Growth: The Effects of Sherman's March, 1850–1920," American Economic Journal: Applied Economics, American Economic Association, vol. 14(4), pages 301-342, October.

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    More about this item

    JEL classification:

    • N61 - Economic History - - Manufacturing and Construction - - - U.S.; Canada: Pre-1913
    • N91 - Economic History - - Regional and Urban History - - - U.S.; Canada: Pre-1913

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