No abstract

Using newly collected subnational data, this article establishes the within-country persistence of economic activity in the New World over the last half millennium, a period including the trauma of European colonisation, the drastic reduction of native populations and the imposition of potentially growth inhibiting institutions. High pre-colonial density areas tend to be denser today due to locational fundamentals and agglomeration effects: colonialists established settlements near existing native populations for reasons of labour, trade, knowledge and defence. These areas, identified with pre-colonial prosperity, also tend to have higher incomes today suggesting that at the subnational level, fortune persists.

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

This paper offers the first systematic historical evidence on the role of a central actor in modern growth theory: the engineer. We construct a database on the share of engineers in the labor force during the Second Industrial Revolution (1870–1914) at the county level for the US, and the state and national levels for the Americas. These measures are robustly correlated with income today after controlling for literacy, other types of higher order human capital (college graduates, lawyers, physicians, patenting) and demand side factors, as well as after instrumenting engineering using the 1862 US Land Grant Colleges program. Differences in engineering density in 1880 account for 10% higher US county incomes today, while national disparities in engineering density can explain approximately a quarter of the income divergence in the Americas. To document the mechanisms through which engineering density works, we show how it is correlated with higher rates of technology adoption and structural transformation across intermediate time periods, and with numerous measures of the knowledge economy today.

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