Collaborative Research: Railroads and the Growth of American Manufacturing: Evidence from Complete Counts of the Census of Manufacturing in 1850, 1860, 1870, and 1880

New York University, New York NY

Investigators

Abstract

Manufacturing in the United States rose to global economic prominence in the 19th century along with the spread of the national railroad network. This research examines the impacts of railroad network expansion on manufacturing productivity growth, using data from the United States Census of Manufacturers. The United States Census of Manufacturers collected detailed information on every manufacturing establishment in the country in 1850, 1860, 1870, and 1880. The investigators are collecting these establishment-level data and assembling digital images of the handwritten Census manuscript pages. The investigators are then entering these data to be made publicly available for use by others and for their own research on the development of American manufacturing. The preliminary analysis from this research, using county-by-industry tabulations of the Census of Manufacturers data, suggests that an expanding railroad network led to substantial economic gains by increasing manufacturing activity in productive areas that were less accessible by natural waterways. These preliminary estimates suggest a central role for transportation infrastructure in supporting economic growth. The investigators extend this analysis to draw in important ways on the new establishment-level data from the Census of Manufacturers, allowing for impacts of expanded access to markets on firm markups. This research further estimates the impacts of improved access to markets on firm technical efficiency, as innovation incentives may increase along with the extent of the market. The investigators also explore the efficiency of allocation of resources across firms in this period, in contrast to the modern United States and modern developing countries, and estimate whether the efficiency of allocation of resources across firms improved with increases in market connectedness. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.