The rural exodus and the rise of Europe

Abstract

To assess the importance of the rural exodus in fostering the transition from stagnation to growth, we propose a unified model of growth and internal migrations. Using an original set of Swedish data, we identify the deep parameters of our model. We show that internal migration conditions had to be favorable enough to authorize an exodus out of the countryside in order to fuel the industrial development of cities and the demographic transition of the country. We then compare the respective contribution of shocks on internal migration costs, infant mortality and inequalities in agricultural productivity to the economic take-off and the demographic transition that occurred in Sweden. Negative shocks on labor mobility generate larger delays in the take-off to growth compared to mortality shocks equivalent to the Black Death. Deepening inequalities of productivity in the agricultural sector, like it has been done by enclosure movements, contributes to accelerate urbanization at the cost of depressed economic growth.