Division of Labor and the Rise of Cities: Evidence from U.S. Industrialization, 1850-1880
While it is extremely difficult to rule out other types of agglomeration economies such as spillovers, this paper suggests that these geographic developments associated with industrial revolution in the U.S. are most consistent with explanations based on division of labor, job search and matching costs.
Link
http://papers.nber.org/papers/w12246