[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/5303.html
   My bibliography  Save this paper

The Antebellum Transportation Revolution and Factor-Price Convergence

Author

Listed:
  • Matthew J. Slaughter
Abstract
In antebellum America an extensive network of canals and railroads was constructed which slashed transportation costs across regions. This 'transportation revolution' presents an interesting case study of the factor-price convergence (FPC) theorem. In this paper I look for integration of regional labor markets driven by FPC by studying the extent to which commodity prices and factor prices converged across regions between 1820 and 1860. My primary result is that I find very little evidence of antebellum FPC across regions. I do find that commodity prices equalized quite markedly. But I also find that nominal labor prices equalized very little, if at all. Given this result, I go on to discuss two aspects of the antebellum economy which very likely helped prevent FPC: differences across regions in endowments and technology. This finding underscores that the FPC theorem does not have unambiguous empirical predictions. How commodity prices feed into factor prices depends crucially on parameters such as endowments and technology.

Suggested Citation

  • Matthew J. Slaughter, 1995. "The Antebellum Transportation Revolution and Factor-Price Convergence," NBER Working Papers 5303, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5303
    Note: ITI
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w5303.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. O'Rourke, Kevin & Williamson, Jeffrey G., 1994. "Late Nineteenth-Century Anglo-American Factor-Price Convergence: Were Heckscher and Ohlin Right?," The Journal of Economic History, Cambridge University Press, vol. 54(4), pages 892-916, December.
    2. Claudia Goldin & Robert A. Margo, 1992. "Wages, Prices, and Labor Markets before the Civil War," NBER Chapters, in: Strategic Factors in Nineteenth Century American Economic History: A Volume to Honor Robert W. Fogel, pages 67-104, National Bureau of Economic Research, Inc.
    3. Leamer, E.E., 1995. "The Heckscher-Ohlin Model in Theory and Practice," Princeton Studies in International Economics 77, International Economics Section, Departement of Economics Princeton University,.
    4. Robert E. Gallman & John Joseph Wallis, 1992. "American Economic Growth and Standards of Living before the Civil War," NBER Books, National Bureau of Economic Research, Inc, number gall92-1.
    5. Adams, Donald R., 1992. "Prices and Wages in Antebellum America: The West Virginia Experience," The Journal of Economic History, Cambridge University Press, vol. 52(01), pages 206-216, March.
    6. Howard Bodenhorn & Hugh Rockoff, 1992. "Regional Interest Rates in Antebellum America," NBER Chapters, in: Strategic Factors in Nineteenth Century American Economic History: A Volume to Honor Robert W. Fogel, pages 159-187, National Bureau of Economic Research, Inc.
    7. Coelho, Philip R. P. & Shepherd, James F., 1976. "Regional differences in real wages: The United States, 1851-1880," Explorations in Economic History, Elsevier, vol. 13(2), pages 203-230, April.
    8. James, John A., 1976. "The Development of the National Money Market, 1893-1911," The Journal of Economic History, Cambridge University Press, vol. 36(4), pages 878-897, December.
    9. Robert A. Margo, 1992. "Wages and Prices during the Antebellum Period: A Survey and New Evidence," NBER Chapters, in: American Economic Growth and Standards of Living before the Civil War, pages 173-216, National Bureau of Economic Research, Inc.
    10. Rosenbloom, Joshua L., 1991. "Occupational Differences in Labor Market Integration: The United States in 1890," The Journal of Economic History, Cambridge University Press, vol. 51(2), pages 427-439, June.
    11. Margo, Robert A. & Villaflor, Georgia C., 1987. "The Growth of Wages in Antebellum America: New Evidence," The Journal of Economic History, Cambridge University Press, vol. 47(4), pages 873-895, December.
    12. Hatton, Timothy J. & Williamson, Jeffrey G., 1991. "Unemployment, employment contracts, and compensating wage differentials: michigan in the 1890s," The Journal of Economic History, Cambridge University Press, vol. 51(3), pages 605-632, September.
    13. Hatton, Timothy J. & Williamson, Jeffrey G., 1991. "Wage gaps between farm and city: Michigan in the 1890s," Explorations in Economic History, Elsevier, vol. 28(4), pages 381-408, October.
    14. Rosenbloom, Joshua L., 1990. "One Market or Many? Labor Market Integration in the Late Nineteenth-Century United States," The Journal of Economic History, Cambridge University Press, vol. 50(1), pages 85-107, March.
    15. Hatton, Timothy J. & Williamson, Jeffrey G., 1991. "Integrated and Segmented Labor Markets: Thinking in Two Sectors," The Journal of Economic History, Cambridge University Press, vol. 51(2), pages 413-425, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kevin H. O'Rourke & Jeffrey G. Williamson, 1999. "The Heckscher-Ohlin Model Between 1400 and 2000: When It Explained Factor Price Convergence, When It Did Not, and Why," NBER Working Papers 7411, National Bureau of Economic Research, Inc.
    2. Giovanni Federico & Paul Sharp, 2013. "The cost of railroad regulation: the disintegration of American agricultural markets in the interwar period," Economic History Review, Economic History Society, vol. 66(4), pages 1017-1038, November.
    3. Mario J. Crucini & Gregor W. Smith, 2016. "Distance And Time Effects In Swedish Commodity Prices, 1732-1914," Working Paper 1357, Economics Department, Queen's University.
    4. Mario J. Crucini & Gregor W. Smith, 2014. "Geographic Barriers to Commodity Price Integration: Evidence from US Cities and Swedish Towns, 1732 - 1860," CAMA Working Papers 2014-75, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    5. Jaramillo, Carlos Felipe & Nupia, Oskar Andrés & Romero, Carmen Astrid, 2001. "Integración en el mercado laboral colombiano : 1945-1998," Chapters, in: Meisel-Roca, Adolfo (ed.), Regiones, ciudades y crecimiento económico en Colombia, chapter 3, pages 91-146, Banco de la Republica de Colombia.
    6. Taylor, Alan M., 1999. "Sources of convergence in the late nineteenth century," European Economic Review, Elsevier, vol. 43(9), pages 1621-1645, October.
    7. Wolfgang Keller & Carol H. Shiue & Xin Wang, 2020. "Capital markets and grain prices: assessing the storage cost approach," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 14(2), pages 367-396, May.
    8. Matthew J. Slaughter, 1998. "International Trade and Per Capita Income Convergence: A Difference-in-Differences Analysis," NBER Working Papers 6557, National Bureau of Economic Research, Inc.
    9. Robert A. Margo, 1998. "Labor Market Integration Before the Civil War," NBER Working Papers 6643, National Bureau of Economic Research, Inc.
    10. Awaworyi-Churchill, Sefa & Inekwe, John & Ivanovski, Kris & Smyth, Russell, 2022. "Breaks, trends and correlations in commodity prices in the very long-run," Energy Economics, Elsevier, vol. 108(C).
    11. Slaughter, Matthew J., 2001. "Trade liberalization and per capita income convergence: a difference-in-differences analysis," Journal of International Economics, Elsevier, vol. 55(1), pages 203-228, October.
    12. Matthew J. Slaughter, 1997. "Per Capita Income Convergence and the Role of International Trade," NBER Working Papers 5897, National Bureau of Economic Research, Inc.
    13. Michael D. Bordo, 2004. "The United States as a Monetary Union and the Euro: A Historical Perspective," Cato Journal, Cato Journal, Cato Institute, vol. 24(1-2), pages 163-170, Spring/Su.
    14. Collins, William J., 1999. "Labor Mobility, Market Integration, and Wage Convergence in Late 19th Century India," Explorations in Economic History, Elsevier, vol. 36(3), pages 246-277, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthew Slaughter, 2001. "Does trade liberalization converge factor prices? Evidence from the antebellum transportation revolution," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(3), pages 339-362.
    2. Margo, Robert A., 1999. "Regional Wage Gaps and the Settlement of the Midwest," Explorations in Economic History, Elsevier, vol. 36(2), pages 128-143, April.
    3. Robert A. Margo, 2000. "The History of Wage Inequality in America, 1920 to 1970," Macroeconomics 0004035, University Library of Munich, Germany.
    4. Robert A. Margo, 1998. "Labor Market Integration Before the Civil War," NBER Working Papers 6643, National Bureau of Economic Research, Inc.
    5. Joshua L. Rosenbloom, 1996. "The Extent of the Labor Market in the United States, 1850-1914," NBER Historical Working Papers 0078, National Bureau of Economic Research, Inc.
    6. Komlos, John, 2012. "A Three-Decade “Kuhnian” History of the Antebellum Puzzle: Explaining the shrinking of the US population at the onset of modern economic growth," Discussion Papers in Economics 12758, University of Munich, Department of Economics.
    7. Robert A. Margo, 1995. "The Farm-Nonfarm Wage Gap in the Antebellum United States: Evidence fromthe 1850 and 1860 Censuses of Social Statistics," NBER Historical Working Papers 0072, National Bureau of Economic Research, Inc.
    8. Charles W. Calomiris & Christopher Hanes, 1994. "Historical Macroeconomics and American Macroeconomic History," NBER Working Papers 4935, National Bureau of Economic Research, Inc.
    9. Komlos, John & A’Hearn, Brian, 2017. "Hidden negative aspects of industrialization at the onset of modern economic growth in the U.S," Structural Change and Economic Dynamics, Elsevier, vol. 41(C), pages 43-52.
    10. Robert A. Margo, 1999. "The History of Wage Inequality in America, 1820 to 1970," Economics Working Paper Archive wp_286, Levy Economics Institute.
    11. Jeremy Atack & Fred Bateman & Robert A. Margo, 2000. "Rising Wage Dispersion Across American Manufacturing Establishments, 1850-1880," NBER Working Papers 7932, National Bureau of Economic Research, Inc.
    12. Peter H. Lindert & Jeffrey G. Williamson, 2012. "American Incomes 1774-1860," NBER Working Papers 18396, National Bureau of Economic Research, Inc.
    13. Robert A. Mareo, 1994. "The Price of Housing in New York City, 1830-1860," NBER Historical Working Papers 0063, National Bureau of Economic Research, Inc.
    14. Jaremski, Matthew, 2014. "National Banking's Role in U.S. Industrialization, 1850–1900," The Journal of Economic History, Cambridge University Press, vol. 74(1), pages 109-140, March.
    15. Komlos, John, 2019. "Shrinking in a growing economy is not so puzzling after all," Economics & Human Biology, Elsevier, vol. 32(C), pages 40-55.
    16. Guillaume Vandenbroucke, 2008. "The American Frontier: Technology versus Immigration," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 283-301, April.
    17. Barry Eichengreen, 2019. "Trade Policy and the Macroeconomy," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 67(1), pages 4-23, March.
    18. Barry Eichengreen, 2008. "Sui Generis EMU," European Economy - Economic Papers 2008 - 2015 303, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    19. Kris James Mitchener & Mari Ohnuki, 2008. "Institutions, Competition, and Capital Market Integration in Japan," IMES Discussion Paper Series 08-E-12, Institute for Monetary and Economic Studies, Bank of Japan.
    20. Knick Harley, 2003. "Growth theory and industrial revolutions in Britain and America," Canadian Journal of Economics, Canadian Economics Association, vol. 36(4), pages 809-831, November.

    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5303. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.