Advanced Search
MyIDEAS: Login to save this paper or follow this series

Economies of Scale in Nineteenth Century American Manufacturing Revisited: A Resolution of the Entrepreneurial Labor Input Problem

Contents:

Author Info

  • Robert A. Margo

Abstract

In a famous paper, Kenneth Sokoloff argued that the labor input of entrepreneurs was generally not included in the count of workers in manufacturing establishments in the early censuses of manufacturing. According to Sokoloff, this biased downward econometric estimates of economies of scale if left uncorrected. As a fix Sokoloff proposed a particular “rule of thumb” imputation for the entrepreneurial labor input. Using establishment level manufacturing data from the 1850-80 censuses and textual evidence I argue that, contrary to Sokoloff’s claim, the census did generally include the labor of entrepreneurs if it was economically relevant to do so, and therefore Sokoloff’s imputation is not warranted for these census years. However, I also find that the census did understate the labor input in small relative to large establishments as Sokoloff asserted, but for a very different reason. The census purported to collect data on the average labor input but, in fact, the data most likely measure the typical number of workers present. For very small establishments the reported figures on the typical number of workers are biased downwards relative to a true average but this is not the case for large establishments. As a result, the early censuses of manufacturing did overstate labor productivity in small relative to large establishments but the size of the bias is smaller than alleged by Sokoloff.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/w19147.pdf
Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19147.

as in new window
Length:
Date of creation: Jun 2013
Date of revision:
Publication status: Forthcoming: Economies of Scale in Nineteenth Century American Manufacturing Revisited: A Resolution of the Entrepreneurial Labor Input Problem , Robert A. Margo. in Enterprising America: Businesses, Banks, and Credit Markets in Historical Perspective , Collins and Margo. 2014
Handle: RePEc:nbr:nberwo:19147

Note: DAE
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Claudia Goldin & Kenneth L. Sokoloff, 1981. "Women, Children, and Industrialization in the Early Republic: Evidence from the Manufacturing Censuses," NBER Working Papers 0795, National Bureau of Economic Research, Inc.
  2. 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, Cambridge University Press, vol. 64(01), pages 172-192, March.
  3. Jeremy Atack & Fred Bateman & Robert Margo, 2006. "Steam Power, Establishment Size, and Labor Productivity Growth in Nineteenth Century American Manufacturing," NBER Working Papers 11931, National Bureau of Economic Research, Inc.
  4. Thomas Weiss, 1991. "Long Term Changes in U.S. Agricultural Output per Worker, 1800 to 1900," NBER Historical Working Papers, National Bureau of Economic Research, Inc 0023, National Bureau of Economic Research, Inc.
  5. Atack, Jeremy & Bateman, Fred & Margo, Robert A., 2003. "Productivity in manufacturing and the length of the working day: evidence from the 1880 census of manufactures," Explorations in Economic History, Elsevier, Elsevier, vol. 40(2), pages 170-194, April.
  6. Atack, Jeremy, 1985. "Industrial structure and the emergence of the modern industrial corporation," Explorations in Economic History, Elsevier, Elsevier, vol. 22(1), pages 29-52, January.
  7. Atack, Jeremy, 1978. "Estimation of Economies of Scale in Nineteenth-Century United States Manufacturing and the Form of the Production Function," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 38(01), pages 268-270, March.
  8. Stanley L. Engerman & Robert E. Gallman, 1986. "Introduction to "Long-Term Factors in American Economic Growth"," NBER Chapters, in: Long-Term Factors in American Economic Growth, pages 1-6 National Bureau of Economic Research, Inc.
  9. Stanley L. Engerman & Robert E. Gallman, 1986. "Long-Term Factors in American Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number enge86-1.
  10. Kris Inwood & Ian Keay, 2012. "Diverse paths to industrial development: evidence from late-nineteenth-century Canada," European Review of Economic History, Oxford University Press, Oxford University Press, vol. 16(3), pages 311-333, August.
  11. Nye, John Vincent, 1987. "Firm Size and Economic Backwardness: A New Look at the French Industrialization Debate," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 47(03), pages 649-669, September.
  12. Jeremy Atack & Fred Bateman & Robert A. Margo, 2001. "Part-Year Operation in Nineteenth Century American Manufacturing: Evidence from the 1870 and 1880 Censuses," Vanderbilt University Department of Economics Working Papers 0106, Vanderbilt University Department of Economics, revised Mar 2001.
  13. Atack, Jeremy & Bateman, Fred, 1992. "How Long Was the Workday in 1880?," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 52(01), pages 129-160, March.
  14. Doraszelski, Ulrich, 2004. "Measuring returns to scale in nineteenth-century French industry," Explorations in Economic History, Elsevier, Elsevier, vol. 41(3), pages 256-281, July.
  15. Jeremy Atack & Michael R. Haines & Robert A. Margo, 2008. "Railroads and the Rise of the Factory: Evidence for the United States, 1850-70," NBER Working Papers 14410, National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:19147. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.