Title: Did the Rise of the South D eindustrialize the North? Gordon Hanson (Harvard and NBER)\, René Livas (Harvard)
Abstract:
Between 1910 and 1980\, the share of U
S 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 accou
nt for the factors behind the timing of the South’s industrialization\, inc
luding the region’s delayed transition out of agriculture\, the Great Migra
tion\, the construction of US interstate highways\, and the rise of unionis
m in the North. Second\, we estimate the causal impact of Southern manufact
uring job growth on Northern local labor markets. Northern regions more exp
osed to the rise of the South saw larger declines in manufacturing employme
nt\, slower population growth\, greater earnings inequality (among whites a
fter 1940)\, and lower median earnings (for Blacks after 1940). Before 1940
\, manufacturing job loss in the North was largely offset by employment gai
ns in services\; after 1940\, manufacturing job loss resulted in overall de
clines in employment rates\, especially among Black men. In ongoing work\,
we are exploring sources of Northern resilience to the decline of manufactu
ring.