Working Paper: CEPR ID: DP9819
Authors: Alan Fernihough; Kevin Hjortshøj O'Rourke
Abstract: We examine the importance of geographical proximity to coal as a factor underpinning comparative European economic development during the Industrial Revolution. Our analysis exploits geographical variation in city and coalfield locations, alongside temporal variation in the availability of coal-powered technologies, to quantify the effect of coal availability on historic city population sizes. Since we suspect that our coal measure could be endogenous, we use a geologically derived measure as an instrumental variable: proximity to rock strata from the Carboniferous era. Consistent with traditional historical accounts of the Industrial Revolution, we find that coal had a strong influence on city population size from 1800 onward. Counterfactual estimates of city population sizes indicate that our estimated coal effect explains at least 60% of the growth in European city populations from 1750 to 1900. This result is robust to a number of alternative modelling assumptions regarding missing historical population data, spatially lagged effects, and the exclusion of the United Kingdom from the estimation sample.
Keywords: coal; geography; historical population; industrial revolution
JEL Codes: J10; N13; N53; O13; O14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| coal-using technologies (L94) | urban growth (R11) |
| proximity to coalfields (L71) | city population sizes (R23) |
| proximity to coalfields (L71) | economic activities (E29) |
| economic activities (E29) | city population sizes (R23) |
| coal proximity (L71) | urban growth (R11) |