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The settlement of the United States, 1800 to 2000: the long transition towards Gibrat's law

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  • Klaus Desmet
  • Jordan Rappaport

Abstract

A prominent strand of economic literature argues that population growth rates across locations areas are uncorrelated with the population levels of those locations (“Gibrat’s Law”). Such uncorrelated growth, it is argued, can account for the current distribution of population across locations. This paper shows that, on the contrary, locations’ population growth throughout U.S. history has always been highly correlated with their initial population levels. Throughout the entire 19th century and the early 20th century, low-population locations tended to grow faster than intermediate-population locations, thereby causing the distribution of population to become more compressed. Throughout the second half of the 19th century and the entire 20th century, population growth among the highest-population locations was faster than population growth among intermediate-population locations, thereby causing the distribution of population to become more dispersed. ; This pattern of population growth is driven by two separate forces. First is the “entry” of new locations into the United States as the country spread westward. These locations typically entered with a low population after which many of them gradually transitioned up to much larger ones. Such transitions can account for the faster growth of low population locations. Second, the congestion arising from limited supplies of land within any given location may have eased over time. This may have occurred, for example, with the technology-driven move by workers from agriculture to manufacturing and services. Such a shift would cause high-population places to grow faster. ; Understanding historical population growth across locations gives insight into near-future population growth. For example, since 2000 population growth in larger locations (though not necessarily the very largest) has tended to outpace population growth in intermediate and smaller locations. This suggests that ongoing technological change may be continuing to relieve the “congestion” associated with living in large metro areas while increasing the disadvantages of living in small locations. Rapid advances in information technology are a possible source of such technological change.

Suggested Citation

  • Klaus Desmet & Jordan Rappaport, 2013. "The settlement of the United States, 1800 to 2000: the long transition towards Gibrat's law," Research Working Paper RWP 13-02, Federal Reserve Bank of Kansas City.
  • Handle: RePEc:fip:fedkrw:rwp13-02
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    References listed on IDEAS

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    1. Mitchener, Kris James & McLean, Ian W., 1999. "U.S.Regional Growth And Convergence, 1880–1980," The Journal of Economic History, Cambridge University Press, vol. 59(04), pages 1016-1042, December.
    2. Dinkelman, Taryn & Schulhofer-Wohl, Sam, 2015. "Migration, congestion externalities, and the evaluation of spatial investments," Journal of Development Economics, Elsevier, vol. 114(C), pages 189-202.
    3. Giesen, Kristian & Suedekum, Jens, 2014. "City age and city size," European Economic Review, Elsevier, vol. 71(C), pages 193-208.
    4. Thorsnes, Paul, 1997. "Consistent Estimates of the Elasticity of Substitution between Land and Non-Land Inputs in the Production of Housing," Journal of Urban Economics, Elsevier, vol. 42(1), pages 98-108, July.
    5. Xavier Gabaix, 1999. "Zipf's Law for Cities: An Explanation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 739-767.
    6. Guy Michaels & Ferdinand Rauch & Stephen J. Redding, 2012. "Urbanization and Structural Transformation," The Quarterly Journal of Economics, Oxford University Press, vol. 127(2), pages 535-586.
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    Cited by:

    1. Behrens, Kristian & Robert-Nicoud, Frédéric, 2015. "Agglomeration Theory with Heterogeneous Agents," Handbook of Regional and Urban Economics, Elsevier.
    2. Rosenthal, Stuart S. & Ross, Stephen L., 2015. "Change and Persistence in the Economic Status of Neighborhoods and Cities," Handbook of Regional and Urban Economics, Elsevier.
    3. Ioannides, Yannis M. & Zhang, Junfu, 2017. "Walled cities in late imperial China," Journal of Urban Economics, Elsevier, vol. 97(C), pages 71-88.
    4. repec:wiw:wiwrsa:ersa14p34 is not listed on IDEAS
    5. Jørn Rattsø & Hildegunn E. Stokke, 2014. "Population Divergence and Income Convergence: Regional Distribution Dynamics for Norway," Regional Studies, Taylor & Francis Journals, vol. 48(11), pages 1884-1895, November.

    More about this item

    JEL classification:

    • N91 - Economic History - - Regional and Urban History - - - U.S.; Canada: Pre-1913
    • N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • 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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