Full Citation
Title: The Effect of Deindustrialization on Local Economies: Evidence from New England Textile Towns
Citation Type: Miscellaneous
Publication Year: 2022
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Abstract: This paper documents the persistence of a local labor demand shock from a key episode of deindustrialization in the US: the decline of the New England textile industry in the 1920s. Although spatial equilibrium models predict worker migration in response to a loss of local employment, New England towns that heavily depended on the textile industry in 1900 did not experience a significant decline in population compared to other towns. Individuals in these towns, especially those with a lower level of wealth, were less likely to out-migrate. Adult workers switched to the agricultural sector and faced decreased occupational earnings. Using a matched difference-indifferences design that exploits variation in timing and location of large textile plant closures, I find that young individuals in plant closure towns increased their eighth-grade completion, but their labor market outcomes did not improve by 1940. My findings provide policy implications for local economic recovery, such as offering migration assistance to the low and middle-class workforce and promoting diversity in the local industrial base.
Url: https://jchoi7206.github.io/JiwonChoi/JiwonChoi_JMP_web.pdf
User Submitted?: No
Authors: Choi, Jiwon
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Data Collections: IPUMS USA
Topics: Land Use/Urban Organization, Poverty and Welfare
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