Market access and occupational upgrading: evidence from the 19th century American transportation network

Jeff Chan

Applied Economics, 2018, vol. 50, issue 45, 4879-4900

Abstract: This article investigates the extent to which county-level market access affects workers’ occupational upgrading and industrial sorting by exploiting the substantial spatial variation and rapid expansion of the United States’ transportation network coverage from 1870 to 1880. First, I find that individuals who enjoyed greater market access in 1880 were more likely to work in higher-paying occupations. Importantly, this result holds across all sectors of employment, for younger and older workers, and for migrants and non-migrants, suggesting that any market size effects on occupational upgrading were not specific to any one group. I also provide results showing that workers were more likely to switch industries within agriculture, but are less likely to do so from manufacturing or services. Finally, I find some evidence of changes to sectoral reallocation, principally away from agriculture, being associated with higher market access. My findings suggest that the expansion of the transportation network in played an important role in determining the type of work Americans performed in the nineteenth century.

Date: 2018
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DOI: 10.1080/00036846.2018.1468554

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