Title: Did the Rise of the South Deindustrialize the North? Gordon Hanson (Harvard and NBER), René Livas (Harvard)
Abstract:
Between 1910 and 1980, the share of US manufacturing employment located in Northern states declined from 80% to 50%. We study whether the industrialization of the South contributed to the North’s shift out of manufacturing over this time period. First, we account for the factors behind the timing of the South’s industrialization, including the region’s delayed transition out of agriculture, the Great Migration, the construction of US interstate highways, and the rise of unionism in the North. Second, we estimate the causal impact of Southern manufacturing job growth on Northern local labor markets. Northern regions more exposed to the rise of the South saw larger declines in manufacturing employment, slower population growth, greater earnings inequality (among whites after 1940), and lower median earnings (for Blacks after 1940). Before 1940, manufacturing job loss in the North was largely offset by employment gains in services; after 1940, manufacturing job loss resulted in overall declines in employment rates, especially among Black men. In ongoing work, we are exploring sources of Northern resilience to the decline of manufacturing.