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The Knowledge Economy at the Turn of the Twentieth Century: The Emergence of Hierarchies

Author

Listed:
  • Luis Garicano
  • Esteban Rossi-Hansberg

Abstract

We use a simplified version of Garicano and Rossi-Hansberg (2005) to understand the impact of improvements in communications technology at the turn of the twentieth century on wages and organization. Improvements in communication technology allow individuals of different skills to abandon self-employment and form teams with each other. In particular, they allow high-skill agents to leverage their knowledge by specializing in the hardest tasks and hiring low-skill agents to do the routine tasks. Organization then exploits the complementarities between individual skills, which in turn affects the distribution of earnings. (JEL: D2, J3, L2, N3) (c) 2006 by the European Economic Association.

Suggested Citation

  • Luis Garicano & Esteban Rossi-Hansberg, 2006. "The Knowledge Economy at the Turn of the Twentieth Century: The Emergence of Hierarchies," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 396-403, 04-05.
    • Handle: RePEc:tpr:jeurec:v:4:y:2006:i:2-3:p:396-403
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    Citations

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    Cited by:

    1. Pol Antras & Luis Garicano & Esteban Rossi-Hansberg, 2006. "Organizing Offshoring: Middle Managers and Communication Costs," 2006 Meeting Papers 133, Society for Economic Dynamics.
    2. repec:cii:cepiei:2014-q2-138-2 is not listed on IDEAS
    3. Federico Diez & Ali Ozdagli, 2012. "Entrepreneurship and Occupational Choice in the Global Economy," 2012 Meeting Papers 1004, Society for Economic Dynamics.
    4. Alexander Berman & Marcelo Cano-Kollmann & Ram Mudambi, 2022. "Innovation and entrepreneurial ecosystems: fintech in the financial services industry," Review of Managerial Science, Springer, vol. 16(1), pages 45-64, January.
    5. André Stel & José Millán & Concepción Román, 2014. "Investigating the impact of the technological environment on survival chances of employer entrepreneurs," Small Business Economics, Springer, vol. 43(4), pages 839-855, December.
    6. Nagamachi, Kohei, 2015. "Team Production and the Allocation of Creativity across Global and Local Sectors," MPRA Paper 63422, University Library of Munich, Germany.
    7. Kyle J. Mayer & Deepak Somaya & Ian O. Williamson, 2012. "Firm-Specific, Industry-Specific, and Occupational Human Capital and the Sourcing of Knowledge Work," Organization Science, INFORMS, vol. 23(5), pages 1311-1329, October.
    8. Kim, Se-Um, 2008. "The Technological Origins of the High School Movement," MPRA Paper 12087, University Library of Munich, Germany.
    9. Federico J. Diez & Ali Ozdagli, 2011. "Self-employment in the global economy," Working Papers 11-5, Federal Reserve Bank of Boston.
    10. Wang, Tianxi & Wright, Greg C., 2020. "Increasing returns to scale within limits: A model of ICT and its effect on the income distribution and occupation choice," Journal of Economic Theory, Elsevier, vol. 189(C).
    11. Daron Acemoglu & Mohamed Mostagir & Asuman Ozdaglar, 2014. "Managing Innovation in a Crowd," NBER Working Papers 19852, National Bureau of Economic Research, Inc.
    12. Hyytinen, Ari, 2021. "Shared problem solving and design thinking in entrepreneurship research," Journal of Business Venturing Insights, Elsevier, vol. 16(C).

    More about this item

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy

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