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Gibrat’s law and the British industrial revolution

Author

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  • Klein, Alexander
  • Leunig, Tim

Abstract

Gibrat's Law states that the growth of towns and cities is independent of their initial size. We show that the Industrial Revolution was revolutionary enough to violate this law for 1761-1801, 1801-1891, and all decades within. Small places grew more slowly throughout this period. Larger towns, in contrast, typically grew faster, but only if they were in core Industrial Revolution Counties. In line with economic theory, towns grew disproportionately when agglomeration economies exceeded urban disamenities, allowing wage rises that induced workers to migrate to the town. This only occurred in places characterised by new, mechanised industries and mining.

Suggested Citation

  • Klein, Alexander & Leunig, Tim, 2015. "Gibrat’s law and the British industrial revolution," LSE Research Online Documents on Economics 62159, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:62159
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    File URL: http://eprints.lse.ac.uk/62159/
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    More about this item

    Keywords

    Gibrat’s law; city-size distribution; industrial revolution;
    All these keywords.

    JEL classification:

    • N93 - Economic History - - Regional and Urban History - - - Europe: Pre-1913
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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