This paper provides an account of the complex changes taking place within New England in the years from 1880 to 1940. After 1880, technological changes and market shifts undermined the sources of comparative advantage that had promoted the concentration of textile and footwear production within the region and propelled regional economic growth. Despite the decline of these industries after 1880, New England’s history after 1880 can hardly be characterized as one of economic decline. Regional economic growth did slow in the wake of these events, but the impact of this slowdown on living standards was moderated, by market driven adjustments in resources away from declining sectors, and by the region’s increasing integration within national and international labor and financial markets. Within the region’s traditional industries, manufacturers shifted product lines to take advantage of the areas in which they could still compete. At the same time, the growth of other manufacturing activities and an increasingly robust service sector created new employment opportunities that laid the foundation for the region’s post-World War II recovery. The responsiveness of international and interregional labor migration moderated the growth of regional labor supplies in response to diminishing opportunities. Meanwhile, financial market integration enabled New Englanders to share in the benefits of more rapid growth elsewhere in the country.

Joshua L. Rosenbloom

Department of Economics

University of Kansas

Summerfield Hall

Lawrence, KS 66044

and NBER

jrosenbloom@ukans.edu