Railways, divergence, and structural change in 19th century England and Wales

Railways transformed inland transport during the nineteenth century. In this paper, we study how railways led to local population change and divergence in England and Wales as it underwent dramatic urbanization. We make use of detailed data on railway stations, population, and occupational structure in more than 9000 spatial units. A network of least cost paths based on major towns and the length of the 1851 rail network is also created to address endogeneity. Our instrumental variable estimates show that having a railway station in a locality by 1851 led to significantly higher population growth from 1851 to 1891 and shifted the male occupational structure out of agriculture. Moreover, we estimate that having stations increased population growth more if localities had greater initial population density and for those 3–15 km from stations, they had less growth compared to localities more distant from stations. Overall, we find that railways reinforced the population hierarchy of the early nineteenth century and contributed to further spatial divergence. Their implications for the geographic distribution of population were large.