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We exploit exogenous variation arising from the historical rollout of the Swedish railroad network across municipalities to identify the impacts of improved transport infrastructure on innovative activity. A network connection led to a local surge in patenting due to an increased entry and productivity of inventors. As the railroad network expanded, inventors in connected areas began to develop ideas with applications outside the local economy, which were subsequently sold to firms along the network. Our findings suggest that reductions in communication and transportation costs were an important driver of the historical emergence of a market for ideas.

Why has collaboration become increasingly central to technological progress? We document the role of lowered travel costs by combining patent data with the rollout of the Swedish railroad network in the 19th and early-20th century. Inventors that gain access to the network are more likely to produce collaborative patents, which is partly driven by long-distance collaborations with other inventors residing along the emerging railroad network. These results suggest that the declining costs of interacting with others is fundamental to account for the long-term increase in inventive collaboration.

We use historical census data to show that Sweden exhibited high levels of intergenerational occupational mobility several decades before the rise of the welfare state. Mobility rates were higher than in other nineteenth- and twentieth-century European countries, closer to those observed in the highly mobile nineteenth-century United States. We leverage mobility variation across Swedish municipalities to shed light on potential determinants: economic growth and migration are positively correlated with mobility, consistent with the patterns observed across countries.

This paper examines the identity and origins of Swedish inventors prior to World War I drawing on the universe of patent records linked to census data. We document that the rise of innovation during Sweden’s industrialization can largely be attributed to a small industrial elite belonging to the upper-tail of the economic, educational, and social status distribution. Analyzing children’s opportunities to become an inventor, we show that inventors were disproportionately drawn from privileged family backgrounds. However, among the middle- and working-class children that managed to overcome the barriers to entry, innovation was a path to upward mobility.

Concerns that prospects for upward mobility are fading are common in popular and scientific discourse. The fact that fewer Americans today surpass their parents’ economic status than in the past has been invoked to explain trends ranging from the recent spike in drug and alcohol poisonings to the growing appeal of right-wing populism. Using General Social Survey data, the authors ask whether people actually feel that their standard of living is falling short of that of previous generations. In contrast to data on income, education, or occupation, a majority still perceive that they have attained a higher standard of living than their parents. At the same time, mobility experiences are becoming increasingly polarized: subjective upward mobility is rising among highly educated, minority, and urban populations and declining among less educated and rural populations.

This paper studies the impact of railroads on town-level growth in Sweden over 150 years. Our analysis builds on the fact that railroads historically were extended quasi-randomly across towns. Towns that gained access to a rail connection grew larger relative to other towns, with large negative spillovers on unconnected nearby towns. Over the 20th century, we find little adjustment to the initial shock in town populations, despite a sharp reversal in relative connectivity. Evidence on historical investments and present-day factors is consistent with this temporary shock giving rise to path dependence in the location of economic activity.

In this paper I examine the location of manufacturing industries across Swedish regions, between 1900 and 1960, using a novel dataset on manufacturing employment disaggregated into eight industries and 24 (NUTS-III) regions. By means of OLS estimations of a model where the regional share of employment in an industry is determined by interactions between region and industry characteristics I show that factor endowments and market potential jointly determined the regional distribution of industries. More specifically, industries with increasing returns to scale and backward linkages located in regions with high market potential. Conversely, industries with forward linkages located in regions with low market potential. Regions endowed with agricultural land and woodland attracted industries that intensively used inputs from the agricultural and forestry sectors. The regional distribution of iron ore did not have substantial effects on the distribution of industries. In the postwar period the endowment of an educated population became important in attracting skill-intensive industries. In sum, market potential seems to have been a more important determinant of industry location than factor endowments. The main results are confirmed using an instrumental variables approach (two-step GMM) where market potential is instrumented by predetermined and geographical instruments.

What are the effects of regional specialization, industrial diversity, and local competition on industrial growth? Utilizing a novel dataset on the Swedish manufacturing industry, 1896-1910, an OLS model is estimated that captures the relationship between dynamic agglomeration externalities, i.e. knowledge spillovers, and employment growth in industries located in cities. The main results are that on a high level of industrial aggregation, specialization is associated with lower successive employment growth in urban industries, while diversity and competition encourages employment growth. On a lower level of aggregation, specialization and diversity decreases employment growth in urban industries, while the effects of competition remain positive. A plausible interpretation is that while inter-industrial externalities were important between broadly defined industries, disaggregated industries benefited from proximity to other dissimilar dominant industries. Thus, there is little support for the notion of Marshall (1890), Arrow (1962), and Romer (1986), that intra-industrial externalities are an important determinant of growth, while there is support, although somewhat inconclusive, for the notion of Jacobs (1969) that diversity and competition encourages industrial growth.