The American Frontier:

∗
Technology versus Immigration
∗∗
Guillaume Vandenbroucke

Review of Economic Dynamics

Vol. 11, No.2, April 2008, pp. 283-301.

Abstract

How important was international immigration for the U.S. and its demography
during the nineteenth century? This paper investigates, quantitatively, its effect
on the westward movement of population and the regional and secular changes
in fertility. Beside immigration, two alternative forces are considered: techno-
logical progress and the land policy (the Homestead Act). An optimal growth
model with endogenous fertility and migration is calibrated, and counterfactual
experiments reveal that the main driving forces were productivity growth and
the declining cost of transportation. International immigration played a lesser
role.

∗ This is a revised version of the third chapter of my dissertation submitted to the University

of Rochester, and previously circulated under the title “The American Frontier: One Hundred
Years of Western Settlement.” I am very thankful to Jeremy Greenwood for his support and
guidance. I am also indebted to two anonymous referees for useful comments. Finally, I
would like to thank Mark Bils, Stanley Engerman and participants at the 2004 SED meetings
in Florence.
∗∗ Department of Economics, University of Southern California, 3620 S. Vermont Ave, KAP

324F, Los Angeles, CA, 90089-0253. Email: vandenbr at usc dot edu.

1
1 Introduction
The United States is often viewed as a “country of immigrants.” The fact is that,
during the nineteenth century, the rate of international immigration averaged
five percent per decade, accounting from seven percent of the rate of population
growth during the 1820s to 33% during the 1850s.1 Panel A of Figure 1 shows
the decomposition of the growth rate of population, and the contributions of
the rates of net migration and natural increase. Panel B proposes a simple
exercise to assess the importance of international immigration. It shows the
U.S. population vis à vis the path that would have occurred if population grew
at its rate of natural increase. The result is remarkable: without international
immigration, the U.S. population in 1900 would have been 52% below its actual
value. This exercise suggests that immigration mattered, but it assumes that
the rate of natural increase was no affected by immigrants. This paper proposes
to relax this assumption and to use the optimal growth model to study the key
patterns of the U.S. demography during the nineteenth century. The objective
is to measure the impact of immigration versus alternative driving forces, such
as various aspects of technological progress, and the land policy set by the U.S.
government – that is the mechanism through which the government attempted
to regulate the settlement of the western territories.
The paper proceeds as follows. The rest of this section presents the main
facts of interest and discusses potential explanations. In particular, Section 1.1
documents the trends in regional fertility and the geographic distribution of
population. Section 1.2 hypothesizes that technological progress, in various ac-
tivities, can be an alternative to international immigration in generating these
trends. Section 2 presents the model and Section 3 the quantitative analysis.
The latter consists first in matching the model to the U.S. data and, then, run-
ning a set of counterfactual experiments to assess the quantitative importance
of each exogenous force built into the model. The conclusion of this exercise is
that immigration had a “smaller-than-expected” impact on the U.S. demogra-
phy, while transportation costs and wage growth mattered significantly. Specif-
ically, one experiment shows that international immigration directly affected
the rate of population growth, but hardly affected the rate of natural increase
and the geographic distribution of population. Another experiment shows that
technological progress in transportation and in the production of goods drove
most of the geographic distribution of population. Finally, the paper considers
two land policies. The baseline policy is reminiscent of the Homestead Act, i.e.,
when the U.S. government gave the land out to those who settled it without
titles. The alternative policy is reminiscent of the auction mechanism often used
to sell acres of western land to the public. Interestingly, the two policies led
to very similar results in terms of western settlement. However, they affected
the rate of natural increase differently: under the Homestead Act, population
growth was slower than when the government sold the land. Section 4 presents
1 See Haines (2000, Table 4.1).

2
some concluding remarks.

1.1 Facts
What were the key patterns of the U.S. demography during the nineteenth
century? First, there was international immigration as mentioned above. It is
interesting to know that immigrants settled in all regions of the country. As
Table 1 shows, the proportion of foreigners rose both in the East and the West
between 1820 and 1860.
In addition to high rates of net migration, the U.S. demography was also
characterized by high rates of natural increase compared with the rest of the
world. At a more disaggregated level, there were sharp regional differences. In
particular, the rate of population growth in the West was higher than in the
East, as illustrated by the changing geographic distribution of population in
Figure 2. This phenomenon, often referred to as the “Westward Expansion,”
shaped the U.S. as we know it today. By the end of the nineteenth century the
rates of population growth in each region have converged, and the geographic
distribution of population became stationary.
The faster population growth experienced by the West was due, at the same
time, to high rates of net migration and natural increase relative to the East.
To illustrate the importance of western migration, consider the East North
Central states: Ohio, Indiana, Illinois, Michigan and Wisconsin.2 During the
early stages of the century this region was the western Frontier of the country,
and Figure 3 shows the decomposition of the growth rate of its population.
Net migration accounted for more than 80% of population growth during the
years 1800-1810, and more than 70% during the next decade. As time passed
its contribution declined, however, because the region was not on the Frontier
anymore and more western areas attracted settlers.
The rest of western population growth derived from natural increase, which
was higher than in areas of older settlement. Table 2 reports the refined birth
ratios – the number of children under 10 years of age per women aged 16 to 44
– by states, for the period 1800-1860.3 In 1800, for example, a white woman
in Ohio had 2.5 children under 10 years of age, vis à vis 1.4 in Massachusetts.
The general pattern transpiring from Table 2 is that the birth ratio was higher
in the West compared to the East, and in the South compared to the North.
2 Similar data are not available for the entire century because the U.S. census did not

systematically collect data on population by state of birth and state of residence before 1850.
3 The birth ratio is not a direct measure of fertility. If a fertile woman has n births per

year, the fertility rate is n. If 90% of children survive to age 10, the birth ratio associated
with a constant fertility n becomes 9n. But fertility is not constant, it declines. Thus, the
birth ratio associated with a contemporaneous fertility rate n is greater than 9n. Specifically,
the current cohort of children aged 0 to 1, determined by current fertility, is of size n while
older cohorts are of size greater than n. It is important to keep in mind that the birth ratio,
or any measure of fertility, does not capture the rate of natural increase perfectly. Ideally, one
should take into account differences in mortality and in the male/female ratio.

3
Observe also the tendency of birth ratios to decline. This was not specific to the
U.S. economy, and has been largely documented. Haines (2000, Table 4.3), for
example, reports a 50% decrease in the birth ratio (49% for the fertility rate,)
for the entire United States over the period 1800-1900.
At this stage, it is important to mention another set of facts closely related
to the U.S. demography of this period. Specifically, Easterlin (1976) shows that
when most of the land in a given state was farmed, out-migration started and
the state’s demography became driven mostly by natural increase. Gallman
(1992, 2000) emphasizes the importance of land-improvement activities. The
large areas of land – the stock of improved land was multiplied by a factor of
about 16 between 1800 and 1900 – in the West were no free lunch. In order to
settle in an area, pioneers had to improve the land which, before that, was not
suitable for production purposes. Investment in productive land and the process
of settlement are, therefore, closely related. Primack (1962) shows that there
has been noticeable productivity gains in land-improvement activities such as
clearing, breaking, irrigating, draining and fencing.

1.2 Discussion
What are the forces that can account for the key patterns of population growth
in the U.S. during the nineteenth century? This paper considers international
immigration as an exogenous force, and asks how it may have contributed to
the demographic trends just described. But other exogenous variables are also
under consideration, such as productivity and/or transportation costs in vari-
ous sectors. These technological factors are alternatives to the hypothesis that
international immigration alone was the cause of the demographic changes. Let
us review, below, the arguments suggesting that all these variables are sound
driving forces.
To discuss the possible effects of international immigration, it is interesting to
start by observing that the vast majority of investment in productive land, after
1800, was done in the West. In other words, one can view the Eastern seaboard
of the U.S. has having a fixed stock of productive land as off 1800, while in
the West households could accumulate productive land. In an economy mostly
dominated by agriculture, a fixed stock of land means decreasing returns to scale.
Thus, as total population grew, the West was the region where growth could
be higher than in the East. In short, population growth may have “pushed”
Americans out of the East toward the West. The question is: which part of
population growth was the most important for this mechanism? The part driven
by natural increase or the part driven by international immigration?
How could technological progress have affected the U.S. demography? First,
and as mentioned earlier, there was productivity gains in land-improvement
activities. These gains made the cost of settling into the West lower and con-
tributed to the westward migration. Second, technological progress also im-
proved transportation for goods and people. This, again, contributed positively

4
to the westward migration. Third, technological progress also permitted real
wage growth in the East despite decreasing returns to scale. This effect weak-
ened the incentive to move westward. Finally, real wage growth affected the
rate of natural increase through childbearing decisions. This point is discussed
in more details below.
Birth ratios were higher in the West than in the East but they declined
in both regions. By 1900, they had converged to a common value.4 Various
mechanisms could be responsible for the declining birth ratios. Greenwood,
Seshadri, and Vandenbroucke (2005), for example, suggest that raising children
is a time-consuming activity so that, as the wage rate grows, the optimal number
of children declines. This framework, however, predicts low fertility in high-
wage regions, a contradiction to historical facts since the real wage rate was
higher in the West than in the East.5 One can imagine, however, that land
availability in the West promoted higher fertility despite the opportunity cost
of raising children. Yasuba (1962) suggests that in a rural economy, young
individuals can establish themselves as households more easily if land is cheap.
This promotes early marriage, and higher marital fertility than in areas where
land is relatively less abundant. Another effect might come from the fact that
a large family is a more valuable asset in rural areas than in urban areas: child
labor can more easily be used on the family farm. Easterlin (1976) proposes
a “bequest model” to rationalize this. His model prescribes that parents feel
concerned with the welfare of their offspring and decide how much to give them
for their start in life. In a land-abundant region it is cheaper to give one’s child
a start in life than in a region where land is less abundant. The first reason is
that land is cheaper so endowing a child with a parcel of land is more affordable
than elsewhere. Second, bequests do not have to be parcels of land. Parents
may wish to endow their kids with any form of non-physical capital. This was
more easily achieved in a high-real-wage area like the West.
The link between fertility and land availability is quite solid. Yasuba (1962)
reports rank correlations between the birth ratio and a measure of land avail-
ability: the number of persons per 1,000 acres of arable land. As he points out,
one could argue that this measure also captures the urbanization movement
that took place during the nineteenth century.6 To address this issue, he also
computes the rank correlation between the birth ratio and the proportion of
urban population by states. Table 3 reports his results. From these numbers,
he concludes that the relationship between fertility and density is “more than
an indirect analysis of the relationship between urbanization and fertility.”
4 See Easterlin (1976).
5 See Coelho and Shepherd (1976) and Margo (2000).
6 See Greenwood and Seshadri (2002) for an analysis of the relationship between urbaniza-

tion and fertility.

5
2 The Model
The economy has three noticeable features: fertility, migration and investment
in land. A household lives for three periods: one as a child and two as an adult.
Only young adults work. There are two locations called East and West, and a
single consumption good is produced in each location with the services of labor,
improved land and an intermediate good. The latter is produced in the East
only, and there is a transportation cost associated with its use in the West.
Another transportation cost is associated with labor moving from one location
to the other.
The amount of land services in the East is fixed. In the West, there is a
land-improvement sector that buys raw land from a government. It also hires
western labor to operate its technology and sells newly improved land to the
households who, in turn, rent it to the consumption-good sectors.
Preferences are defined over consumption and the number of children. House-
holds can choose where to live, and they make this choice only once in their life,
at the beginning of adulthood, before deciding how many children to have. The
childbearing period is the first period of adulthood.

2.1 Firms
2.1.1 Intermediate Good

The technology is xt = zxt hext where xt is the total output of the sector, zxt is an
exogenous productivity parameter and hext is eastern labor. Let qxt denote the
price of x in the East. In the West, the price of the good is qxt (1 + τxt ), where
τxt is an iceberg cost representing the state of the transportation technology.
The optimization problem of the firm is:
max
e
{qxt xt − wte hext } , (1)
hxt

where wte denotes the eastern real wage rate.

2.1.2 Consumption Good

The technology in this sector is described by

³ ´µ ³ ´φ ³ ´1−φ−µ
ytj = zyt hjyt xjt ltj , µ, φ ∈ (0, 1) ,

where the superscript j refers to the location. The variables hjyt , xjt and ltj ,
are inputs of labor, intermediate good and improved land, respectively. The
objective of the eastern and western sectors are
© e ª
e
maxe e
yt − wte heyt − qxt xet − rte lte (2)
hyt ,xt ,lt

6
and © ª
max ytw − wtw hw w w w
yt − qxt (1 + τxt ) xt − rt lt , (3)
hw w w
yt ,xt ,lt

where rtj denotes the rental price of improved land in location j.

2.1.3 Land-Improvement

Eastern land is fixed: lte = le . In the West, the variable ltw , which represents the
productive services of improved land, can increase. Specifically, the total stock
of western land is fixed and represented by the unit interval, but the fraction
of it which is improved and productive is a choice variable. The services of
Rl
productive land, measured in efficiency units, are given by ltw = 0 t Λ(u)du
where lt is the stock of improved land measured in physical units, and Λ is the
density of efficiency units of land. The density function is Λ(u) = 1 − uθ where
θ > 0.
The technology for accumulating new productive land requires the use of
labor only. Thus, the law of motion for the stock of improved land is

lt+1 = lt + zlt hw
lt

where zlt is a technology parameter and hwlt is western labor employed in the
sector. Observe that the stock of improved land does not depreciate.
The profit of period t, during which the land-improvement sector improves
the land in the interval [lt , lt+1 ], is given by
Z lt+1 Z lt+1
wtw
πt (lt , lt+1 ) = qtw Λ(u)du − (lt+1 − lt ) − qtr (u)du.
lt zlt lt

The variable qtw is the price of productive land services, and the function qtr (u) is
the price of raw land set by the government, the discussion of which is postponed
to Section 2.4. The optimization problem of the firm is

∞
à t
!−1
X Y
max π1 (l1 , l2 ) + iτ πt (lt , lt+1 ) (4)
{hw
lt }t≥1 t=2 τ =2
subject to lt+1 = lt + zlt hw
lt , t ≥ 1,
l1 given,

where it is the gross interest rate. Along an optimal trajectory, the marginal
profit of improving the land up to point lt+1 during period t must be the same
as the marginal profit from postponing this decision for one period:
µ w ¶
w wtw r 1 w wt+1 r
qt Λ(lt+1 ) − − qt (lt+1 ) = qt+1 Λ(lt+1 ) − − qt+1 (lt+1 ) . (5)
zlt it+1 zl,t+1

7
2.2 Households
2.2.1 Decision Problem

Denote the lifetime utility for an age-1 household by U (c1 , c2 , n1 ). The variables
c1 and c2 represent consumption and n1 is the number of children. Denote the
cost of raising n children, measured in consumption units, by C(n). There are
three types of age-1 households: those who never change location, call them
Easterners and Westerners, and those who move, call them Movers. Let the
superscript j = e, w, m denotes the type of a household.7 A household of type
j = e, w solves the following maximization problem:
( )
³ ´ cj ³ ´
2,t+1
Vtj = j max U cj1t , cj2,t+1 , nj1t : cj1t + + C nj1t = wtj + Tt
c1t ,cj2,t+1 ,nj1t it+1
(6)
where Tt is a transfer received from the government. The program of a Mover
going from East to West is
½ ¾
¡ m m ¢ m cm 2,t+1
Vtm = m max U c , c
1t 2,t+1 , n m
1t : c1t + + C (n m
1t ) + τht = wt
w
+ Tt
c1t ,cm m
2,t+1 ,n1t it+1
(7)
where τht is the moving cost. Observe that a Mover going to the West receives
the western wage rate since moving takes place at the beginning of adulthood,
before any other decisions. In equilibrium, a household in the East must be
indifferent between staying and moving to the West: Vte = Vtm . The presence of
the moving cost implies, therefore, that the wage rate is higher in the West than
in the East. Hence, only westward migration takes place. For this reason, the
superscript m always refers to a mover going from the East toward the West.

2.2.2 Preferences and the Cost of Raising Children

The optimality condition for fertility is

U3 (c1 , c2 , n1 ) = U1 (c1 , c2 , n1 ) C 0 (n1 ) ,
where time subscripts and type superscripts are dropped to simplify notations.
In words, at an optimum, the marginal benefit of a child, measured by the left-
hand side, must equal its marginal cost. The latter appears in the right-hand
side and is the product of the marginal utility of consumption and the marginal
consumption cost of a child. The choice of the functional forms for U and C is
dictated by two facts that the model aims at matching: the decline of fertility
through time, and the excess fertility in the West, that is in low-density regions.
As mentioned earlier, the decline in fertility can be accounted for along
the lines of Greenwood, Seshadri, and Vandenbroucke (2005). Their approach
7 Notice a slight abuse of notations here, since j referred to the location in the description

of firms, while it refers to the type of a household here.

8
suggests the following choices for preferences and the cost of raising children:

U (c1 , c2 , n1 ) = ln(c1 + c̄) + β ln(c2 + c̄) + σ ln(n1 ) (8)

and
n1
C(n) = w , (9)
zk
where σ > 0 and β ∈ (0, 1). In this formulation, the parameter c̄ is a positive
constant affecting the marginal utility of consumption. Its purpose is to allow
the analysis to benefit from the simplicity of the logarithmic utility, while of-
fering flexibility in the choice of the curvature of the utility function. As will
become transparent soon, this device is useful to generate the decline in fertility.
The parameter zk is a positive constant which measures the “productivity” of
non-market time in the child-raising activity. The quantity n1 /zk , therefore, is
the time spent raising n1 children. The consumption cost of n1 children is the
market value of this time. With these functional forms, the optimality condition
for fertility writes
σ w/zk
= .
n1 c1 + c̄
Observe that, along an equilibrium path where consumption and wages grow at
the same rate the marginal cost of a child increases and, therefore, fertility must
decrease. Notice also that, when c̄ = 0, fertility is constant along a balanced
growth path. Asymptotically, the effect of c̄ vanishes and fertility converges to
this constant.
The framework above implies that fertility is lower in the West, where wages
are higher. To solve this problem, the discussion in Section 1.2 suggested that
the density of population could enter the first order condition for fertility. There
are two approaches here. The first relies on a modification of preferences, the
second on a modification of the child-raising technology. As will become clear
shortly, the two approaches share some similarities – a standard feature of house-
hold production models, pointed out by Benhabib, Rogerson, and Wright (1991).
The first approach consists in introducing density into the utility function.
More precisely, let preferences be represented by
³ κ´
U (c1 , c2 , n1 ) = ln(c1 + c̄) + β ln(c2 + c̄) + σ 1 + ln(n1 ) (10)
d
where κ > 0 and d is the density of population in the region where the household
is living. In a densely populated area, the marginal utility of a child is lower: a
“crowding” effect. One can imagine, for example, that parents internalize the
fact that a child born in a crowded area may have a harder time finding land
and setting up his own farm. They derive less utility from the child because
they foresee that. The utility function in (10) proposes a shortcut to model this
idea. The optimality condition for fertility, derived from combining (9) with
(10), is
³ κ´ σ w/zk
1+ = . (11)
d n1 c1 + c̄

9
With this framework, a higher wage rate does not necessarily imply lower fer-
tility if the density is small enough. As population grows, all the land gets
eventually improved and the density of population increases in each region.
This implies that in the long run the term κ/d converges to zero. Then, fertility
choices converge if wages are converging too.
Another approach to introducing density into the optimal fertility decision
does not rely on preferences. It consists in introducing the density into the cost
of raising kids. One can imagine that, in low-density regions, it is easier to have
children working on a small area of land and contributing to the household’s
income. Thus, although it still takes time to raise a child, this time cost is partly
offset by “child labor.” Suppose, for example, that the time needed to raise one
child is given by (1 + κ/d)−1 /zk , which implies that the time cost of a child is
increasing with density. The consumption cost for n1 children becomes
n1 ³ κ ´−1
C(n1 ) = w 1+ . (12)
zk d
With this formulation, a high-wage low-density area can potentially have high
fertility. When the land gets more settled, it becomes harder to find such areas
of land for children to work (e.g., the yard on the farm becomes smaller), and
the effect of density on the cost of raising children vanishes. The optimality
condition for fertility, derived from combining (12) with (8), is again given by
Equation (11). In what follows, the cost function (9) and the utility function
(10) are used.8

2.3 Demography
Let pw e
t and pt denote the number of age-1 Westerners and Easterners, respec-
tively. Let pm
t denote the number of age-1 Movers going from East to West at
date t. Movers are born in the East but leave it for the West. Their children are
born in the West. Thus, the total age-1 western population is pw m
t + pt , while
the total age-1 eastern population is pet . Let f denote the rate of international
immigration, and assume that immigrants arrive during the first period of their
life, and become age-1 adults during the next period. The law of motion for pw t
is
pw w w m m w m
t+1 = pt n1t + pt n1t + f (pt + pt ). (13)
This equation dictates that the number of age-1 Westerners at date t + 1 has
three sources. First they can be born from the current generation of Westerners:
pw w m m
t n1t . Second, they can be born from the current generation of Movers: pt n1t .
Finally, they can also be moving into the West, directly from the rest of the
8 Notice that, although the two approaches deliver the same first order condition for fertility,
they are not equivalent since they involve different value functions and, therefore, different
allocations. As will appear in Section 3.1, however, the methodology used in the empirical
exercise implies that the quantitative difference between the allocations obtained with each
method is small.

10
world, in proportion f of the current western population. The law of motion
for pet is
pet+1 = pet ne1t − pm e
t+1 + f pt , (14)
that is, age-1 Easterners at t + 1 are either born from the current generation or
coming from the rest of the world. The term −pm t+1 indicates that one has to
subtract those who decide to move out of the East at date t + 1, since they are
not Easterners by definition. The total age-1 population evolves in line with

pw e m w w m m e e
t+1 + pt+1 + pt+1 = pt (n1t + f ) + pt (n1t + f ) + pt (n1t + f ) .

The density of age-1 population in the East is det = pet /le and for the West it is
given by dw w m w
t = (pt + pt )/lt .

2.4 Land Policy

During the nineteenth century the land policy changed a number of times, and
was the subject of intense political debates.9 The general rule was that western
raw land was sold to settlers, by the U.S. government, through an auction
process. The difficulties found in enforcing property rights on the frontier,
however, forced the U.S. government to recognize squatters and legalize their
occupancy of the land at a number of occasions throughout the century. In
1862, the Homestead Act was passed which, essentially, consisted in giving the
land out for free. Formally, the Homestead Act writes qtr (u) = 0 for all t and u.
The consequence of this subsidy (giving out free land) is that the government
has no resources to transfer to households, hence Tt = 0. Later, the quantitative
analysis section considers an alternative land policy.

2.5 Equilibrium
2.5.1 Definition of Equilibrium

In equilibrium bonds and land must deliver the same rate of return, hence
j j
rt+1 + qt+1
it+1 = , j = e, w. (15)
qtj

The western and eastern labor markets must clear:

pw w m m w w
t (1 − n1t /zk ) + pt (1 − n1t /zk ) = hyt + hlt , (16)

pet (1 − ne1t /zk ) = heyt + hext . (17)

In Equations (16) and (17) the left-hand side are western and eastern labor
supplies, taking into account the time spent raising children for each type of
9 See Atack, Bateman, and Parker (2000).

11
household. The right-hand side are labor demands from the sectors operating
in each region. The market for the intermediate good must clear too:

xw e
t + xt = xt . (18)

Finally, the market clearing condition for savings is

pw w m m e e w w e e
t st+1 + pt st+1 + pt st+1 = qt lt+1 + qt l . (19)

where sjt+1 are the savings of an age-1 household of type j during period t,
which will pay off during period t + 1.

Definition 1 A competitive equilibrium is composed of: (i) allocations for house-

holds {cjat , nj1t } for j = e, w, m and a = 1, 2 and firms {hw w e e e w
yt , hlt , hyt , hxt , l , lt };
(ii) prices {wtj , rtj , qtj , qxt , it } for j = e, w, such that

1. The sequence {hext } solves (1) at all t given prices;

2. The sequence {heyt , xet , le } solves (2) at all t given prices;
3. The sequence {hw w w
yt , xt , lt } solves (3) at all t given prices;

4. The sequence {hw

lt } solves (4) given prices;

5. The sequences {cjat , nj1t } for j = e, w solve (6) given prices; the sequence
{cm m
at , n1t } solves (7); and households choose their location optimally, that
is Vt = Vtm ;
e

6. Population growth is described by (13) and (14);

7. Market clears, or conditions (15)-(19) hold.

2.5.2 Balanced Growth

R1
In the long-run all the land is improved in the West: ltw → 0 Λ(u)du ≡ lw , as
t → ∞. Hence, employment in the land-improvement sector converges to zero:
hwlt → 0. Assume that transportation costs converge to zero too: τht , τxt →
0 as t → ∞, implying that eastern and western wages converge. Let total
factor productivity grow by a factor gz > 1 per period, in the consumption and
intermediate good sectors, and assume that gz is large enough to warrant wage
growth. In such case, fertility is the same for all types and is constant through
time.10 Denote it by n1 so that, in each location, the rate of population growth
10 The first order conditions for problem (6) when the cost function (9) and the utility

function (10) are used are

à µ ¶!
cj1t + c̄ 1 nj1t c̄ 1
= 1 − + 1 +
wtj 1+β zk wtj it+1

12
is n1 + f. Then, output in the intermediate good sector grows at rate gz (n1 + f )
and the growth rate of the economy becomes

g = gz1+φ (n1 + f )φ+µ .

Real wages are growing at rate g/(n1 + f ). The optimality conditions for house-
holds imply that individual consumption and savings grow at the same rate as
real wages. Thus aggregate consumption grows at rate g. Since the stock of
land is fixed, the price of land must grow at rate g too. The firms optimality
conditions imply also that the rental rate for land increases at rate g, hence
Equation (15) implies a constant interest rate.

3 Quantitative Analysis
This section presents the quantitative analysis of the model in two parts. The
first consists in assigning numerical values to the model’s parameters. For some,
but not all, one can use a priori information. The remaining parameters are
estimated using U.S. data.
The second part of the section presents a set of counterfactual experiments.
The first one addresses the following question: How did international immigra-
tion affect the U.S. demography? One motivation for asking this question is the
calculation mentioned in the Introduction. If one computed total population
growth between 1800 and 1900, using the observed rate of natural increase as
the growth rate, one would find that in 1900 the U.S. population would have
been 52% below its actual level. This would be a sizeable difference, and one
could reasonably expect that it would have affected the economy and the de-
mography as well. In particular, there would have been less demand on Eastern
resources, and the Westward movement would have been less pronounced. This
calculation suffers from a potential drawback, however, since it assumes that
the rate of natural increase was unaffected by the absence of immigrants. But,
precisely because one should expect economic variables to react to the absence
of immigrants, one should also expect the rate of natural increase to react. A
model of natural increase, such as the one developed earlier, allows one to avoid
this drawback. The second set of experiments consists in assessing the effects of
alternative driving forces built into the model. Specifically, these experiments
and à !−1
cj1t + c̄ nj /zk κ
= 1t 1+
wtj σ djt
In the long-run the terms c̄/wtj and κ/djt converge to zero so that
µ ¶
nj1t 1 1 1
+ = .
zk σ 1+β 1+β
Hence, in the long run, fertility is constant and identical for Easterners, Westerners and
Movers.

13
ask how important was technological progress in production and transporta-
tion for the U.S. demography during the nineteenth century? Finally, the last
experiment proposes an alternative to the land policy described in Section 2.4.

3.1 Calibration
A period is 10 years. The rate of growth of zyt and zxt – the productivity
variables in the consumption and intermediate good sectors – are identical and,
following Gallman (2000, Table 1.4), set to 0.55% per year from 1800 to 1840
and 0.71% per year from 1840 to 1900. The rate of growth of zlt , the produc-
tivity in the land-improvement sector is set to 0.3% per year from 1800 to 1860
and 0.6% per year from 1860 to 1900. The former figure is the rate of growth of
labor productivity in agriculture. This does not correspond, strictly speaking,
to land-improvement activities, but it is used to compensate the lack of data
for this period. The latter number is derived from the rate of growth of labor
productivity in land-clearing and breaking, fencing, draining and irrigating, fol-
lowing the work of Primack (1962). The initial values zy,1800 , zx,1800 and zl,1800
are set to one.
O’Rourke and Williamson (1999) report a 1.5% annual rate of decline for
transportation costs. This number is used for the two transportation costs in
the model. The initial value for τx is τx,1800 = 0.5 × 0.86−5 which implies that,
in 1850, the value of τx is 0.5, consistent with figures reported by Herrendorf,
Schmitz, and Teixeira (2006).11 The choice of τh,1800 is discussed below.
Following Gallman (2000), the labor share is set to µ = 0.6 and the interme-
diate good share to φ = 0.2, the capital share. Given that the model’s period
is 10 years, the interpretation of the intermediate good as capital which fully
depreciates is acceptable. As mentioned earlier, the rate of net migration is set
to f = 5%.
The remaining parameters are a = (β, θ, le , τh,1800 , σ, κ, c̄). They consist in
the discount factor, the curvature parameter for the density of efficiency units
of land, the stock of land services in the East, the initial cost of transportation,
and utility parameters. To assign a value to a proceed as follows. First, guess
an initial value. Then, let the economy start off in 1800. Let the initial old
population be 1, and assume that it is entirely located in the East. Fix the
initial stock of improved land to l1800 = 0.06, following Gallman (1986).12 From
this point, compute the equilibrium trajectory of the economy, feeding in the
paths of technology and transportation costs. The length of the equilibrium
trajectory is 30 periods, although only the first ten periods, corresponding to
the nineteenth century, are reported. Let pt represent the total population at
date t. Since households are alive for two periods and pjt is the age-1 population
11 They report that the price difference for wheat, between the east and the midwest, was

50% at mid-century.
12 Gallman (1986, Table B-5) reports the stock of improved land by regions. The stock is

normalized by its value in 1900, implying that the initial value, l1800 , is 6%.

14
of type j, the total population of type j at date t is pjt + pjt−1 and, therefore,
X
pt = pjt + pjt−1 .
j=w,e,m

Define also
pw w m m
t + pt−1 + pt + pt−1
P̂t (a) = ,
pt
Q̂t (a) = lt ,
R̂t (a) = wtw /wte ,

where P̂t (a) is the predicted ratio of western to total population at a. Let Pt be
its empirical counterpart as displayed in Figure 2. The terms Q̂t (a) and R̂t (a)
are the stock of improved land and the West-East wage ratio predicted by the
model. Let Qt and Rt be their empirical counterparts.13 Finally, define
 
i1900 − 1.07
p1900 /p1800 − 13.6
 w 
M (a) =  f1800
e
/f1800 − 1.3 

 f1900
w e
/f1900 − 1.0 
f1900 /f1800 − 0.5

where ftw , fte and ft are western, eastern and total fertility, respectively.14 Let
a solves
Xh i
min (P̂t (a) − Pt )2 + (Q̂t (a) − Qt )2 + (R̂t (a) − Rt )2 + M (a)> M (a).
a
t∈T

where T = {1800, 1810, . . . , 1900}.15 The first part of this objective function
implies that the economy is matched to the time series of the ratio of West-
erners, the wage ratio and the stock of improved land. The data on the stock
of improved land and the ratio of Westerners are useful in pinning down the
values of θ and le , the curvature of the density of land services and the stock of
improved land in the East. The West-East wage ratio helps pinning down the
initial value of the moving cost, τh,1800 .
The second part of the objective function includes five additional restric-
tions. The first is the difference between the model’s gross interest rate in 1900
and 1.07. Hence, this part of the objective function implies that, in the bal-
anced growth path, the interest rate of the model economy is about 7%. This
13 The source for the wage ratio is Coelho and Shepherd (1976) and Margo (2000). The

source for the stock of improved land is Gallman (1986).

14 Specifically, western fertility is the weighted average of the fertility of Westerners and

Movers, eastern fertility is simply ne1t and total fertility is the weighted average of the fertility
of the three types of households.
15 This procedure implies that the choice of the modeling strategy for the household’s prob-

lem, discussed in Section 2.2.2, matters little for the equilibrium allocation since the latter is
imposed through the solution of the minimization problem above.

15
restriction helps pinning down the discount factor, β. The remaining moments
are related to population growth and fertility. First, there is a measure of total
population growth from 1800 to 1900. The U.S. data shows that total popula-
tion was multiplied by 13.6 during this period, and the parameters are restricted
to imply such growth in the model. This restriction acts mostly on parameters
such as zk and the utility parameters controlling the level of fertility. The third
and fourth line of M (a) impose a 30% difference between western and eastern
fertility in 1800, and convergence by 1900. The 30% difference corresponds to
the average difference between eastern and western birth ratios in 1800 in Table
2.16 These two restrictions act mostly on κ. The last line of M (a) imposes a
50% decline in fertility. This restriction affects mostly the value of c̄.
Table 4 presents the baseline calibration and Figure 4 the quality of the
match between the model and the U.S. data. As one can see the model fits the
data reasonably well. In particular, it is able to generate a fertility difference in
favor of the West while the wage rate is higher in the West than in the East. The
model matches closely the growth of total population as well as its geographic
distribution. Average fertility, however, does not decline as much as in the U.S.
data: 20% vis à vis 50%. This discrepancy is mostly due to c̄ which affects
both the level of fertility and its reaction to the wage rate. One can see from
Equation (11) that larger values of c̄ imply, at the same time, larger fertility rates
everything else equal, and faster decline in fertility in response to an increase
in the wage rate. The constraint that population must be multiplied by 13.6,
imposed in the objective function, pushes the minimization routine toward “low”
values of c̄, reducing at the same time the magnitude of the decrease in fertility.

3.2 Counterfactual Experiments

The first experiment asks the following question: How did international immi-
gration affect the U.S. economy during the nineteenth century? To answer this
question, the model is simulated under the calibration of Table 4, but with the
rate of international immigration, f , set to zero. Figure 5 presents the results
of this experiment. Its main message is that international immigration did not
affect the U.S. beyond its direct effect on population growth. Specifically, the
biggest departures from the baseline simulations are in panels B and D. Panel
B represents the stock of improved land which increases less in the case where
no immigrants came to the U.S. than in the baseline case. Although the dif-
ference is noticeable, one can argue that it is small. Panel D represents total
population. Notice that fertility (Panel C) is hardly affected by immigrants.
To understand, observe that two forces are at work here. On the one hand,
the absence of immigrants permits higher wages in the counterfactual economy
and, hence, fertility tends to be lower. To be precise, the real wage rates in
the counterfactual economy are initially identical to the those of the baseline
16 The central states (Ohio, Indiana, Kentucky, Tennessee and Mississippi) correspond to

the West.

16
economy. As time unfolds, however, the difference in total population between
the two economies increases, and the wage difference increases too. In 1900, the
regional real wages in the counterfactual economy are 8% above their counter-
parts in the baseline simulation (Panel E). On the other hand, less population
growth implies smaller regional densities (Panel F) and, hence, higher fertility
rates. Under the baseline calibration, the effects of these two opposing forces
offset each other.
Five experiments measure the effects of technological progress. In the first,
the equilibrium path of the economy is computed without decline in the trans-
portation cost τht . In other words, τht stays constant at its initial level but all
other technology variables evolve as described in Table 4. In the second experi-
ment, only the transportation cost for goods, τxt , differs from the baseline case,
and stays constant at its initial level. Experiments three to five consist in shut-
ting down technological progress in zlt , zyt and zxt . Thus they are measuring
the effects of productivity in land improvement, the production of the consump-
tion good and that of the intermediate good, respectively. Figure 6 shows the
results. The transportation cost for households is the main contributor to the
westward shift of the population – panel A. Without the reduction in this cost,
only 35% of the population would have settled the West in 1900, versus 56% in
the baseline case. The reduction in the transportation cost for goods and tech-
nological progress in the consumption good sector also contributed noticeably
to the change in the geographic distribution of population. To understand this,
notice that reductions in the transportation cost for goods makes it easier for the
western sector to use the intermediate goods, which raises the marginal prod-
uct of western labor and attracts Movers to the west. Technological progress
in the consumption-good sector affects the distribution of population through
various channels. On the one hand there is no wage growth in its absence. This
pushes households out of the East toward the West, where they can use more
land to compensate this lack of productivity. On the other hand, households
face increasing transportation costs which, with decreasing real wages cannot
be paid easily. This effect tends to reduce the number of Movers. Finally, the
absence of wage growth promotes higher fertility and population growth (Panel
C). The change in fertility is not even, however, and eastern fertility exceeds
western fertility. This difference drives the ratio of western to total population
down. In terms of land improvement, Panel B shows no great differences among
the various experiments. Yet, one can see that without technological progress
in the consumption-good sector, the economy tends to accumulate more land
while, without decreasing cost of transportation, it tends to accumulate less.17
17 The importance of the transportation revolution for the development of the American

economy has been emphasized earlier. See, for example, Fishlow (1965). Likewise, the work of
Primack (1962) documents the extent of technological progress in the land-improvement sector
and its impact on western development. However, neither Fishlow nor Primack present these
phenomena in the context of a calibrated version of the optimal growth model. Herrendorf,
Schmitz, and Teixeira (2006), to the contrary, propose a model of transportation and calibrate
it to the U.S. economy during the nineteenth. They use it to investigate regional trade
patterns, though, rather than demographic changes.

17
 The last experiment proposes an alternative land policy. What if the home-
stead act was never passed? Suppose that the U.S. government sold raw land
to the land-improvement sector, and contemplate the following price system.
For u ∈ [lt , lt+1 ] the government charges qtr (u) = qtw Λ(u) − wtw /zlt and for
u ≥ lt+1 , the government sets qtr (u) = qt+1 r
(u)/it+1 . Such a price function
corresponds to what would have prevailed if land was traded on a competitive
market. The price set for u ∈ [lt , lt+1 ] corresponds to a zero-profit condition
in the land improvement sector. The price set for u ≥ lt+1 corresponds to a
no-arbitrage condition. One can also interpret the zero-profit condition as the
outcome of an auction process: land-improvement firms bid for the land until
there is no profit to extract. Under this policy, the government’s transfer to
Rl
a particular household is Tt = ltt+1 qtr (u)dl/(pw e m
t + pt + pt ). Figure 7 presents
the result of this experiment. The main message, here, is that selling raw land
instead of giving it out affects mostly the fertility rates (panel C), but is not
enough to warrant significant changes in the stock of improved land (panel B)
or the geographic distribution of population (panel A). To understand this re-
sult, contemplate first the optimality condition for the land-improvement sector,
Equation (5). Under the baseline calibration, the price of raw land, qtr (u), is
set to zero and, therefore, does not appear in the equation. Under the alter-
native policy, the price of raw land is not zero, but the no-arbitrage condition
qtr (lt+1 ) = qt+1
r
(lt+1 )/it+1 , implies that it drops out of the equation. In other
words, under the alternative policy the land-improvement firm cannot increase
its value by reallocating purchases of raw land through time. Thus, in each case
the pace of land accumulation depends on fundamentals only: technology and
the quality of the land. The value of the land-improvement firm is different in
the two economies, though. This difference is channeled, through transfers, to
households and promotes an increase in fertility (panel C) hence faster popu-
lation growth (panel D). The latter fuels an additional demand for improved
land (the opposite of the no-immigration case) but, quantitatively, this effect is
small.

4 Conclusion
During the nineteenth century, the U.S. experienced remarkable demographic
changes. This paper proposed to measure how immigration and technological
progress may have caused them. Despite its magnitude, the impact of interna-
tional immigration turned out to be small compared to that of technology. On
the one hand, immigrants slowed down wage growth and hence promoted higher
fertility inside the U.S. On the other hand they crowded the land which turned
out to offset the increase in fertility. In the end, the rate of natural increase in
the U.S. was barely affected. Technological progress, through the transporta-
tion revolution and wage growth, had the biggest impact on the geographic
distribution of population and its rate of natural increase.

18
References
Atack, J., F. Bateman, and W. N. Parker (2000): “Northern Agriculture
and the Westward Movement,” in Engerman and Gallman (2000).
Benhabib, J., R. Rogerson, and R. Wright (1991): “Homework in Macroe-
conomics: Household Production and Aggregate Fluctuations,” Journal of
Political Economy, 99(6), 1166–1187.
Coelho, P. R., and J. F. Shepherd (1976): “Regional Differences in Real
Wages: The United States, 1851-1880,” Explorations in Economic History,
13(2), 203–230.
Easterlin, R. A. (1976): “Population Change and Farm Settlement in the
Northern United States,” The Journal of Economic History, 36(1), 45–75.
Engerman, S. L., and R. E. Gallman (eds.) (2000): The Cambridge Eco-
nomic History of the United States. Cambridge University Press, Cambridge.
Fishlow, A. (1965): American Railroads and the Transformation of the Ante-
Bellum Economy. Harvard University Press, Cambrige.
Gallaway, L. E., and R. K. Vedder (1975): “Migration and the Old North-
west,” in Essays in Nineteenth Century Economic History: the Old Northwest,
ed. by D. C. Klingaman, and R. K. Vedder. Ohio University Press, Athen.
Gallman, R. E. (1986): “The United States Capital Stock in the Nineteenth
Century,” unpublished notes.
(1992): “American Economic Growth before the Civil War: The Tes-
timony of the Capital Stock Estimates,” in American Economic Growth and
Standards of Living before the Civil War, ed. by R. E. Gallman, and J. J.
Wallis, Chicago. The University of Chicago Press.
(2000): “Economic Growth and Structural Change in the Long Nine-
teenth Century,” in Engerman and Gallman (2000).
Greenwood, J., and A. Seshadri (2002): “The U.S. Demographic Transi-
tion,” The American Economic Review, 92(2), 153–159.
Greenwood, J., A. Seshadri, and G. Vandenbroucke (2005): “The Baby
Boom and Baby Bust,” The American Economic Review, 95(1), 183–207.
Haines, M. R. (2000): “The Population of the United States, 1790-1920,” in
Engerman and Gallman (2000).
Herrendorf, B., J. A. Schmitz, and A. Teixeira (2006): “Exploring the
Implications of Large Decreases in Transportation Costs,” Mimeo.
Margo, R. A. (2000): Wages and Labor Markets in the United States, 1820-
1860. The University of Chicago Press, Chicago.

19
Mitchell, B. R. (1998): International Historical Statistics: The Americas,
1750-1993. Stockton Press, New York.
O’Rourke, K. H., and J. G. Williamson (1999): Globalization and
History, The Evolution of a Nineteenth-Century Atlantic Economy. MIT
Press,Cambridge.
Primack, M. L. (1962): “Farm Formed Capital in American Agriculture, 1850-
1910,” Ph.D. thesis, University of North Carolina.

Yasuba, Y. (1962): Birth Rates of the White Population in the United States,
1800-1860, an Economic Study, Johns Hopkins University studies in historical
and political science; 79th ser., 2. Johns Hopkins Press, Baltimore.

20
 30 Net International

Migration
U.S. Population
14
25

12
Growth Rate, %

20

U.S. Population, 1800 = 1

10

15 8

6
10
Natural Increase

4
Population with
5
Natural Increase Only
2

0
0
0

0
-0

-1

-2

-3

-4

-5

-6

-7

-8

-9

-0
0

1800 1820 1840 1860 1880 1900

9

9
7

8
1

Period Year

A B

Figure 1: Population Growth in the United States, 1800–1900.

Note – The source of data is Haines (2000, Table 4.1). Panel A represents the growth rate of
total population, per decade, and its decomposition between natural increase and net migra-
tion. This decomposition is based on the following accounting equation, where pt represents
total population:
pt+1 − pt #birthst − #deathst #immigrantst − #outmigrantst
= + .
pt pt pt
The first element on the right-hand side is the rate of natural increase and the second element
is the rate of net migration. Panel B represents the level of population, normalized to one in
1800, and the path that the rate of natural increase alone would have implied.

21
 1820 1860 1820 1860
New England Middle Atlantic
Maine 0.57 6.00 New York 1.13 26.10
New Hampshire 0.05 6.40 New Jersey 0.59 19.00
Vermont 0.40 10.40 Pennsylvania 1.05 15.10
Massachusetts 0.66 22.20
Rhode Island 0.30 21.90
Connecticut 0.21 17.90
East North Central West North Central
Ohio 0.61 14.20 Minnesota - 34.70
Indiana 0.57 8.80 Iowa - 15.70
Illinois 1.11 19.00 Missouri 0.89 15.10
Michigan 7.63 20.30 Dakota - 68.90
Wisconsin - 35.80 Nebraska - 22.10
Kansas - 11.90

Table 1: Percent of Foreign Born per Region, 1820 and 1860.

Note – The source of data is Yasuba (1962, Table V-17).

22
 1.0

0.9

0.8
Fraction of Total Population

0.7

West
0.6

0.5

0.4

East
0.3

0.2

0.1

0.0

1800 1820 1840 1860 1880 1900

Year

Figure 2: Regional Shares of Total Population, U.S., 1790–1910.

Note – The source of data is Mitchell (1998, Table A.3). The “East” is arbitrarily defined
as the New-England, Middle-Atlantic and South Atlantic regions. The list of states in these
regions are Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New
York, New Jersey, Pennsylvania, Delaware, Maryland, District of Columbia, Virginia, West
Virginia, North Carolina, South Carolina, Georgia and Florida. The West consists of all other
states in the continental U.S.

23
 450

400

Net Migration
350

300
Growth Rate, %

250

200

150 Natural Increase

100

50

1800-10 1810-20 1820-30 1830-40 1840-50 1850-60

Period

Figure 3: The Rate of Population Growth in the East North Central States,
1800–1860.
Note – The source of data is Gallaway and Vedder (1975, Table 1).

24
 1800 1810 1820 1830 1840 1850 1860
New England
Maine 1974 1883 1621 1463 1416 1217 1108
New Hampshire 1704 1558 1385 1207 1112 915 900
Vermont 2068 1788 1468 1341 1286 1131 1079
Massachusetts 1477 1421 1269 1064 987 857 895
Rhode Island 1455 1405 1314 1139 989 910 887
Connecticut 1512 1438 1280 1114 1040 915 930
Middle Atlantic
New York 1871 1895 1706 1466 1273 1070 1063
New Jersey 1822 1736 1629 1457 1360 1208 1150
Pennsylvania 1881 1841 1748 1536 1456 1322 1293
South Atlantic
Delaware 1509 1687 1596 1393 1332 1314 1269
Maryland 1585 1598 1509 1302 1284 1237 1207
Virginia 1954 1777 1710 1587 1544 1421 1408
North Carolina 1920 1857 1822 1645 1606 1389 1351
South Carolina 2030 1951 1851 1681 1635 1357 1324
Georgia 2116 2103 2002 1962 1966 1672 1508
Florida 1899 1705 1726 1568
East North Central
Ohio 2550 2303 2131 1871 1696 1466 1360
Indiana 2014 2307 2235 2139 1835 1702 1531
Illinois 2201 2235 2175 1869 1607 1471
Michigan 2121 1826 1834 1602 1463 1301
Wisconsin 1569 1493 1594

Table 2: Number of Children Under 10 Years of Age per 1,000 Women Aged
16-44, U.S., 1800–1860.
Note – The source of data is Yasuba (1962, Table II.7).

25
 1800 1810 1820 1830 1840 1850 1860
East South Central
Kentucky 2371 2271 2070 1891 1890 1597 1517
Tennessee 2424 2302 2204 2033 1916 1594 1483
Alabama 2252 2198 2075 1637 1536
Mississippi 2509 2089 2222 2113 2053 1776 1582
West North Central
Minnesota 1508 1619
Iowa 1837 1726 1636
Missouri 2375 2189 2223 1960 1581 1532
Dakota 1157
Nebraska 1460
Kansas 1496
West South Central
Arkansas 2159 2205 2160 1843 1727
Louisiana 1904 1845 1738 1597 1294 1320
Texas 1745 1761
Mountain
Colorado 764
New Mexico 1265 1406
Utah 1513 2004
Nevada 1270
Pacific
Washington 1847
Oregon 2005 2104
California 1111 1287

Table 2: Number of Children Under 10 Years of Age per 1,000 White Women
Aged 16-44, U.S., 1800–1860 (continued.)

26
 1800 1810 1820 1830 1840 1850 1860
pop./acres of land −.633 −.848 −.802 −.773 −.675 −.604 −.526
prop. of urban pop. −.468 −.360 −.544 −.409 −.495 −.593 −.366

Table 3: Rank Correlations with the Birth Ratio, U.S., 1800–1860.

Note – The source of data is Yasuba (1962, Tables V.4 and V.10). The figures correspond
to the rank correlation between the birth ratio and the population per acres of land (or the
proportion of urban population) across states.

Preferences β = 0.98, c̄ = 0.09, σ = 0.525, κ = 15

Technology µ = 0.6, φ = 0.2, θ = 0.1, zk = 3.7, le = 0.02
Initial Value Annual Growth Rate
zy 1.0 0.55% (1800-40) and 0.71% (1840-00)
zx 1.0 0.55% (1800-40) and 0.71% (1840-00)
zl 1.0 0.30% (1800-60) and 0.60% (1860-00)
τx 1.06 −1.5%
τh 0.07 −1.5%

Table 4: Baseline Calibration.

27
 0.8

1.0
0.7 Model
Fraction of Total Population in the West

Stock of Improved Land, 1900=1

0.6 0.8

0.5 Model
0.6

0.4

0.4
0.3
U.S. Data

0.2 0.2

0.1
0.0
U.S. Data

0.0

1800 1820 1840 1860 1880 1900 1800 1820 1840 1860 1880 1900

Year Year

A B

1.6

U.S. Data
14

1.5
Model
12
Model
Total Population, 1800 = 1

1.4
U.S. Data 10

8
ww / we

1.3

1.2
4

1.1
2

0
1.0

1800 1820 1840 1860 1880 1900 1800 1820 1840 1860 1880 1900
Year Year

C D

1.8

West
1.7

1.6

1.5
Target Model
i1900 1.07 1.06
Fertility

1.4
East
p1900 /p1800 13.6 12.9
w e
f1800 /f1800 1.3 1.27
1.3

w e
1.2
f1900 /f1900 1.0 1.0
1.1
f1900 /f1800 0.5 0.8
1800 1820 1840 1860 1880 1900

Year

E F

Figure 4: The Model’s Fit.

Note – Panels A, B and C display the model’s ability to fit the time series of the ratio of
western to total population, the stock of improved land and the ratio of western to eastern
real wages, respectively. Panel D displays the model’s total population vis à vis its empirical
counterpart. Panel E shows the western and eastern fertility rates predicted by the model.
Finally, panel F indicates the model’s ability to match the objectives in M (a).

28
 1.0
Baseline

0.6

Fraction of Total Population in the West No International

0.8

Stock of Improved Land, 1900 = 1

Immigration
0.5

Baseline, 0.6

0.4 No International Immigration

0.4
0.3

0.2
0.2

0.1 0.0

1800 1820 1840 1860 1880 1900 1800 1820 1840 1860 1880 1900

Year Year

A B

1.8

14 Baseline
1.7

West 12
1.6 Baseline and

Total Population, 1800 = 1 10

no International Immigration

1.5

8
Fertility

1.4
No International
6
Immigration
1.3

East
4
Baseline and
1.2
no International Immigration
2
1.1

0
1.0

1800 1820 1840 1860 1880 1900 1800 1820 1840 1860 1880 1900
Year Year

C D

1.09 14
East:
Baseline,
Ratio of Wages: No Immigration / Baseline

1.08 No Immigration Wage / Baseline Wage

12 East

1.07

10
Density of Population / 100

1.06

1.05 8
No Immigration,
1.04 East
6
1.03
Baseline,
4
1.02
West

1.01 2 No Immigration,

West: West
1.00
No Immigration Wage / Baseline Wage 0
0.99

1800 1820 1840 1860 1880 1900 1800 1820 1840 1860 1880 1900
Year Year

E F

Figure 5: Counterfactual Experiment – No International Immigration.

Note – A: share of westerners in the total population in the baseline calibration and the
counterfactual experiment; B: stock of improved land; C: regional fertility rates; D: total
population; E: ratio of counterfactual wage rate to baseline wage rate in each region; F:
density of population in each region.

29
 Baseline Baseline
0.6 1.0
Exp. 1 Exp. 1
Fraction of Total Population in the West

Exp. 2 Exp. 2

Stock of Improved Land, 1900 = 1

Exp. 3 Exp. 3
0.5 0.8
Exp. 4 Exp. 4

Exp. 5 Exp. 5

0.4 0.6

0.3 0.4

0.2 0.2

0.1 0.0

1800 1820 1840 1860 1880 1900 1800 1820 1840 1860 1880 1900

Year Year

A B

50
Baseline

Exp. 1

Exp. 2
40
Exp. 3
Total Population, 1800 = 1

Exp. 4

Exp. 5
30

20

10

1800 1820 1840 1860 1880 1900

Year

Figure 6: Counterfactual Experiment – No Technological Progress.

Note – Experiment 1: no technological progress in the transportation of labor; Experiment
2: no technological progress in the transportation of goods; Experiment 3: no progress in
land-improvement technology; Experiment 4: no progress in consumption-good technology;
Experiment 5: no progress in intermediate good technology.

30
 0.6 1.0
No Homestead Act
Fraction of Total Population in the West

Stock of Improved Land, 1900 = 1

0.5 0.8

Baseline and
Baseline
0.4 0.6
No Homestead Act

0.3 0.4

0.2 0.2

0.1 0.0

1800 1820 1840 1860 1880 1900 1800 1820 1840 1860 1880 1900

Year Year

A B

Baseline, West

Baseline, East 16
1.8 No Homestead Act, West No Homestead Act
No Homestead Act, East 14
1.7

12
1.6
10
Total Population

1.5
8
Fertility

1.4 Baseline
6

1.3
4

1.2
2

1.1 0

1800 1820 1840 1860 1880 1900 1800 1820 1840 1860 1880 1900
Year Year

C D

Figure 7: Counterfactual Experiment – No Homestead Act.

31