Working Paper #2012-02 – Capital Intensity and U.S. County Population Growth during the Late Nineteenth Century

Department of Economics
University of Delaware
Working Paper #2012-02

Capital Intensity and U.S. County Population Growth during the Late Nineteenth Century

Burton A. Abrams, Jing Li and James G. Mulligan

ABSTRACT

The United States witnessed substantial growth in manufacturing and urban populations during the last half of the nineteenth century.  To date, no convincing evidence has been presented to explain the shift in population to urban areas.  We find evidence that capital intensity, particularly new capital in the form of steam horsepower, played a significant role in drawing labor into counties and by inference into urban areas.  This provides support for the hypothesis that the locational decisions of manufacturers and their placement of capital in urban areas fueled urban growth in the nineteenth century. 

JEL Codes: J61, N11, O33

Keywords: urbanization, capital intensity, regional population growth, technological change