The Urban Premium During Industrialization: Evidence from Rural-Urban Migration in Sweden

Lilla salen Session 6: Historical Perspectives on Migration organized by Jonatan Andersson


Jonatan Andersson, Jakob Molinder


The process of industrialization is typically associated with rural-to-urban migration and a gap in incomes between cities and the countryside. To what extent is the income difference driven by the direct impact on job attainment of moving to an urban area or the result of people with more skilled occupations selecting into cities? In this paper, we make use of exceptional Swedish longitudinal data that allows us to estimate individual fixed-effects event-study models of the impact of rural-to-urban migration on occupational incomes between the 1870s and WW2. Both a yearly panel sample and data on individuals linked across censuses suggests a migration premium of about 10 to 15 percent of yearly occupational income, which accounts for about half of the cross-sectional difference. We conclude that cities did make individuals more productive during industrialization.


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