The U.S. Demographic Transition Perfect Capital MarketsBetween 1800 and 1940 the United States went through a dramatic demographic transition. In 1800 the average woman had seven children, and 94 percent of the population lived in rural areas. By 1940 the average woman birthed just two kids, and only 43 percent of populace lived in the country. The question is: What accounted for this shift in the demographic landscape? The answer given here is that technological progress in agriculture and manufacturing explains these facts. JEL Classification: E1,J1,O3Keywords: fertility; technological progress, agriculture, manufacturingSuggested citation: Greenwood, Jeremy, and Ananth Seshadri, 2001. "The U.S. Demographic Transition Perfect Capital Markets," Federal Reserve Bank of Cleveland, Working Paper, no. 01-18.