Sprouting Cities: How Rural America Industrialized

We study the joint process of urbanization and industrialization in the US economy between 1880 and 1940. We show that only a small share of aggregate industrialization is accounted for by the relocation of workers from remote rural areas to industrial hubs like Chicago or New York City. Instead, most sectoral shifts occurred within rural counties, dramatically transforming their sectoral structure. Most industrialization within counties occurred through the emergence of new ”factory” cities with notably higher manufacturing shares rather than the expansion of incumbent cities. In contrast, today’s shift towards services seems to benefit large incumbent cities the most.

That is from a new paper by Fabian Eckert, John Juneau, and Michael Peters.  A Jeffersonian might think that was a big part of what made America so great earlier in the 20th century?  Whereas today, at least for the Jeffersonian…?