Gibrat’s law and the British industrial revolution

Alexander Klein and Tim Leunig

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: Gibrat’s law; city-size distribution; industrial revolution (search for similar items in EconPapers)
JEL-codes: N93 R12 (search for similar items in EconPapers)
Pages: 96 pages
Date: 2015-05
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