Reap What You Sow: Agricultural Technology, Urbanization and Structural Change

This paper studies how productivity-enhancing agricultural technology affects urban- ization 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 high- light the potentially unintended, disruptive force of innovative technologies.