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Taking Technology to Task: The Skill Content of Technological Change in Early Twentieth Century United States

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  • Rowena Gray

    () (University of Essex, UK)

Abstract

This paper presents a new picture of the labor market effects of technological change in pre-WWII United States. I show that, similar to the recent computerization episode, the electrification of the manufacturing sector led to a "hollowing out" of the skill distribution whereby workers in the middle of the distribution lost out to those at the extremes. To conduct this analysis, a new dataset detailing the task composition of occupations in the United States for the period 1880-1940 was constructed using information about the task content of over 4,000 occupations from the Dictionary of Occupational Titles (1949). This unique data was used to measure the skill content of electrification in U.S. manufacturing. OLS estimates show that electrification increased the demand for clerical, numerical, planning and people skills relative to manual skills while simultaneously reducing relative demand for the dexterity-intensive jobs which comprised the middle of the skill distribution. Thus, early twentieth century technological change was unskill-biased for blue collar tasks but skill-biased on aggregate. These results are in line with the downward trend in wage differentials within U.S. manufacturing up to 1950. To overcome any threat to the exogeneity of the electricity measure, due for example to endogenous technological change, 2 instrumental variable strategies were developed. The first uses cross-state differences in the timing of adoption of state-level utility regulation while the second exploits differences in state-level geography that encouraged the development of hydro-power generation and thus made electricity cheaper. The results from these regressions support the main conclusions of the paper.

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File URL: http://ehes.org/EHES_No9.pdf
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Bibliographic Info

Paper provided by European Historical Economics Society (EHES) in its series Working Papers with number 0009.

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Length: 47 pages
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:hes:wpaper:0009

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Keywords: Technological change; skill bias;

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References

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  1. Christopher R. Knittel, 2006. "THE ADOPTION OF STATE ELECTRICITY REGULATION: THE ROLE OF INTEREST GROUPS -super-* ," Journal of Industrial Economics, Wiley Blackwell, vol. 54(2), pages 201-222, 06.
  2. Acemoglu, Daron, 1997. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," CEPR Discussion Papers 1707, C.E.P.R. Discussion Papers.
  3. Atack, Jeremy & Bateman, Fred & Margo, Robert A., 2004. "Skill Intensity and Rising Wage Dispersion in Nineteenth-Century American Manufacturing," The Journal of Economic History, Cambridge University Press, vol. 64(01), pages 172-192, March.
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  8. Black, Sandra E. & Spitz-Oener, Alexandra, 2007. "Explaining Women's Success: Technological Change and the Skill Content of Women's Work," ZEW Discussion Papers 07-033, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  9. Boyan Jovanovic & Peter L. Rousseau, 2005. "General Purpose Technologies," NBER Working Papers 11093, National Bureau of Economic Research, Inc.
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  13. Aimee Chin & Chinhui Juhn & Peter Thompson, 2006. "Technical Change and the Demand for Skills during the Second Industrial Revolution: Evidence from the Merchant Marine, 1891-1912," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 572-578, August.
  14. Atack, Jeremy & Bateman, Fred, 1992. "How Long Was the Workday in 1880?," The Journal of Economic History, Cambridge University Press, vol. 52(01), pages 129-160, March.
  15. David H. Autor & Frank Levy & Richard J. Murnane, 2001. "The Skill Content of Recent Technological Change: An Empirical Exploration," NBER Working Papers 8337, National Bureau of Economic Research, Inc.
  16. Hausman, William J. & Neufeld, John L., 2002. "The Market for Capital and the Origins of State Regulation of Electric Utilities in the United States," The Journal of Economic History, Cambridge University Press, vol. 62(04), pages 1050-1073, December.
  17. Marina Adshade & Ian Keay, 2010. "Technological and Organizational Change and the Employment of Women: Early Twentieth-Century Evidence from the Ohio Manufacturing Sector," Feminist Economics, Taylor and Francis Journals, vol. 16(1), pages 129-157.
  18. Margo, Robert A, 1986. "Race and Human Capital: Comment," American Economic Review, American Economic Association, vol. 76(5), pages 1221-24, December.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Electrification, skills and manufacturing
    by Chris Colvin in NEP-HIS blog on 2012-01-28 18:15:01
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Cited by:
  1. Guy Michaels & Ferdinand Rauch & Stephen J. Redding, 2013. "Task Specialization in U.S. Cities from 1880-2000," NBER Working Papers 18715, National Bureau of Economic Research, Inc.

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