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Technical Change and the Wage Structure During the Second Industrial Revolution: Evidence from the Merchant Marine, 1865-1912

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Author Info
Aimee Chin () (Department of Economics, University of Houston)
Chinhui Juhn () (Department of Economics, University of Houston)
Peter Thompson () (Department of Economics, Florida International University)

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Abstract

Using a large, individual-level wage data set, we examine the impact of a major technological innovation — the development of powerful and economical steam engines — on skill demand and the wage structure among the merchant marine. Our data reveal a complex range of responses to the new technology. The new technology created a new demand for skilled workers, the engineers, while destroying other skills relevant only to sail. There were also contradictory effects among the less skilled. On the one hand, technological innovation may have been deskilling for production work since many experienced able-bodied seamen were replaced by laborers in the engine room. On the other hand, able-bodied seamen employed on steam earned a premium relative to their counterparts on sail. Our data allow us to identify this steam premium as a skill premium rather than a compensating differential. At the managerial level, we identify a skill premium on steam for mates, whose job became more complex on the larger vessels, but not for bosuns whose job did not. In aggregate, there is little change traditional measures of the skill premium, but such measures are too crude to illuminate the rich wage dynamics induced by a major technical innovation.

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File URL: http://www.fiu.edu/orgs/economics/wp2004/04-10.pdf
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Publisher Info
Paper provided by Florida International University, Department of Economics in its series Working Papers with number 0410.

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Length: 42 pages
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:fiu:wpaper:0410

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Related research
Keywords: steam power; wage inequality; skill premium; technical change; merchant marine; Canada;

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Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
N71 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: Pre-1913

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