Time to Accumulate: The Great Migration and the Rise of the American South

Dongkyu Yang

No nt6kg, SocArXiv from Center for Open Science

Abstract: The idea that labor scarcity can induce economic development has long been hypothesized (Hicks, 1932; Habakkuk, 1962), but the evidence remains limited. This paper examines how the Second Great Migration (1940–1970) spurred structural change in the American South between 1970 and 2010. Empirical results using shift-share instruments show that out-migration incentivized capital investment and capital-augmenting technical change, increasing capital per worker and output in both agriculture and manufacturing, at least until 2010. Labor was reallocated from agriculture to non-agriculture. I then develop a dynamic spatial equilibrium model that allows for substitution between factors of production, factor-biased technical change, and factor abundance-based trade to characterize this process. The quantitative analysis indicates that labor-capital substitution played a major role in adjustments to South-to-North migration.

Date: 2024-11-01
New Economics Papers: this item is included in nep-gro, nep-his and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:nt6kg

DOI: 10.31219/osf.io/nt6kg

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