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The Evolution of Work

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  • Markus Mobius
  • Raphael Schoenle

Abstract

The division of labor first increased during industrialization and then decreased again after 1970 as job roles have expanded. We explain these trends in the organization of work through a simple model where (a) machines require standardization to exploit economies of scale and (b) more customized products are subject to trends and fashions which make production tasks less predictable and a strict division of labor impractical. At the onset of industrialization, the market supports only a small number of generic varieties which can be mass-produced under a strict division of labor. Thanks to productivity growth, niche markets gradually expand, producers eventually move into customized production and the division of labor decreases again. The model predicts capital-skill substitutability during industrialization and capital skill complementarity in the maturing industrial economy. Moreover, conventional calculations of the factor content of trade underestimate the impact of globalization because they do not take into account changes in product market competition induced by trade. We test our model by exploiting the time-lags in the introduction of bar-coding in three-digit SIC manufacturing industries in the US. We find that both increases in investments in computers and bar-coding have led to skill-upgrading. However, consistent with our model bar-coding has affected mainly the center of the skill distribution by shifting demand away from the high-school educated to the less-than-college educated.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12694.

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Date of creation: Nov 2006
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Handle: RePEc:nbr:nberwo:12694

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Cited by:
  1. Dag Rønningen, 2007. "Are technological change and organizational change biased against older workers? Firm-level evidence," Discussion Papers 512, Research Department of Statistics Norway.
  2. Kurokawa, Yoshinori, 2008. "Fixed Cost, Number of Firms, and Skill Premium: An Alternative Source for Rising Wage Inequality," MPRA Paper 14014, University Library of Munich, Germany.
  3. 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.
  4. Jacques Durieu & Hans Haller & Philippe Solal, 2011. "Nonspecific Networking," Games, MDPI, Open Access Journal, vol. 2(1), pages 87-113, February.
  5. Matthew F. Mitchell, 2005. "Specialization And The Skill Premium In The 20th Century," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(3), pages 935-955, 08.
  6. Lozano, Fernando A. & Lopez, Mary J., 2010. "Border Enforcement and Selection of Mexican Immigrants in the United States," IZA Discussion Papers 4898, Institute for the Study of Labor (IZA).
  7. Birner, Regina & Davis, Kristin & Pender, John & Nkonya, Ephraim & Anandajayasekeram, Ponniah & Ekboir, Javier & Mbabu, Adiel & Spielman, David & Horna, Daniela & Benin, Samuel & Cohen, Marc J., 2006. "From "best practice" to "best fit": a framework for designing and analyzing pluralistic agricultural advisory services worldwide," FCND discussion papers 210, International Food Policy Research Institute (IFPRI).
  8. Richard Baron & Jacques Durieu & Hans Haller & Rahul Savani & Philippe Solal, 2008. "Good neighbors are hard to find: computational complexity of network formation," Review of Economic Design, Springer, vol. 12(1), pages 1-19, April.
  9. André Blais & Jean-Benoît Pilet & Karine Van Der Straeten & Jean-François Laslier & Maxime Heroux-Legault, 2011. "To vote or to abstain? An experimental study or first past the poste and PR elections," Working Papers hal-00616823, HAL.
  10. Thomas J. Holmes & Matthew F. Mitchell, 2008. "A theory of factor allocation and plant size," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 329-351.
  11. Hisashi Ohtsuki, 2011. "Evolutionary Dynamics of the Nash Demand Game: A Diffusion Approach," Dynamic Games and Applications, Springer, vol. 1(3), pages 449-461, September.
  12. Maurin, Eric & Thesmar, David & Thoenig, Mathias, 2002. "Globalization and the demand for skill: An Export Based Channel," CEPR Discussion Papers 3406, C.E.P.R. Discussion Papers.

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