Regional Development and Integration in the Early 20th Century United States

Hurt, Matthew

Graduate Thesis Or Dissertation

Regional Development and Integration in the Early 20th Century United States Public Deposited

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Citeable URL: https://scholar.colorado.edu/concern/graduate_thesis_or_dissertations/kw52j955c

Abstract

During the first half of the 20th century new technology, ideas, and behaviors transformed American society from a technologically advanced rural and agricultural people into an industrial power. The pace of this transformation was uneven across regions which has contributed to the notion that while goods markets were well integrated in the United States at the turn of the century, labor markets were not - particularly Southern labor markets. This dissertation uses new data and techniques to measure different frictions in labor markets, particularly in manufacturing, and consistently finds that Southern labor markets did not possess significantly larger labor market frictions than other regional labor markets.

The first chapter takes a broad view of American labor markets by using linked Census data between 1850-1940 to estimate the costs associated with workers changing occupations and locations. This chapter shows that instead of falling, costs increased modestly for workers changing occupation and location. It also shows that these switching costs were lower when moving within region and higher when moving across regions, but that the trend held for all regions.

The second chapter studies the manufacturing sector to revisit the notion that wage gaps between the North and South were evidence of weak labor market integration. Using newly hand recorded data from the United States Census of Manufactures it is possible to test for the existence of relative factor price equality by comparing wage bill ratios for high skilled salaried workers and low skilled wage earners. Based on this proxy measure of labor market integration it increased over time across the entire country between 1920-1930. In no period were Southern states measurably different from their peers.

The last chapter uses the same manufacturing data to determine the extent of convergence in the American manufacturing sector. I show that convergence was faster in the manufacturing sector than the overall economy. I find that convergence across states was stronger than convergence across industries implying that the arrival of new industries was less important for convergence in income that took place across the country than convergence of other economic features of the States.

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