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

Jeremy Atack, Michael R. Haines and Robert Andrew Margo

No 14410, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: N61 N71 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his and nep-ure
Date: 2008-10
Note: DAE
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