Abstract
We provide microeconomic evidence on the effect of railroad infrastructure on local economic shocks and individuals' opportunities. Building on historical transportation networks and individual-level longitudinal data, we focus on the expansion of railroads in the nineteenth century United-States. Exploiting time-variation in railroad-induced market access at the county-level, we document substantial shifts in the local economic structure. We address endogeneous placement of the network using a version of market access purged of the effects of population changes and of nearby counties. We then look at individuals’ trajectories and examine the relative contributions of the occupations transitioning, labor market entrance and geographic mobility channels. Our results suggest that if railroad poorly affects individuals occupations transitioning on average, market access plays a key role in the inter-generational farm succession process. Additionally, we show that changes in market access persistently shape career paths of young workers. Last, we show that railroads act as a driving force in the inter-county population flows. This railroad attractiveness is paired with substantial effects on occupational shifts for movers, underscoring railroad-induced geographic mobility as a prime factor of intra-generational social mobility.
Authors: Clément Bosquet (Sorbonne Economics Center), Maxence Castiello (Sorbonne Economics Center)