This paper studies how productivity-enhancing agricultural technology affects urbanization by provoking structural change. We investigate these issues using a natural experiment in the United States. The results show that technologies which improve crop productivity lead to a less urbanized economy as economic activity relocates from manufacturing and services towards agriculture. The effects are highly persistent and are driven by the technology increasing agricultural labor demand. Our findings highlight the potentially unintended, disruptive force of innovative technologies.
- agricultural technology
- structural change