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The Origins of Technology-Skill Complementarity

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Author Info
Claudia Goldin
Lawrence F. Katz

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Abstract

Current concern with relationships among particular technologies, capital, and the wage structure motivates this study of the origins of technology-skill complementarity in manufacturing. We offer evidence of the existence of technology-skill and capital-skill (relative) complementarities from 1909 to 1929, and suggest that they were associated with continuous-process and batch methods and the adoption of electric motors. Industries that used more capital per worker and a greater proportion of their horsepower in the form of purchased electricity employed relatively more educated blue-collar workers in 1940 and paid their blue-collar workers substantially more from 1909 to 1929. We also infer capital-skill complementarity using the wage-bill for non-production workers and find that the relationship was as large from 1909-19 as it has been recently. Finally, we link our findings to those on the high-school movement (1910 to 1940). The rapid increase in the supply of skills from 1910 to 1940 may have prevented rising inequality with technological change.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5657.

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Date of creation: Jul 1996
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Publication status: published as Quarterly Journal of Economics, Vol. 113 (June 1998): 683-732.
Handle: RePEc:nbr:nberwo:5657

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J0 - Labor and Demographic Economics - - General
N0 - Economic History - - General

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  1. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-68, November. [Downloadable!] (restricted)
  2. David H. Autor, 2001. "Wiring the Labor Market," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 25-40, Winter. [Downloadable!] (restricted)
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  3. Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February. [Downloadable!] (restricted)
  5. Ann P. Bartel & Nachum Sicherman, 1999. "Technological Change and the Skill Acquisition of Young Workers," NBER Working Papers 5107, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Mincer, J., 1989. "Human Capital Responses To Technological Change In The Labor Market," Discussion Papers 1989_38, Columbia University, Department of Economics.
  7. Doms, Mark & Dunne, Timothy & Troske, Kenneth R, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 253-90, February.
  8. Bartel, A.P. & Sicherman, N., 1995. "Technological Change and the Skill Acquisition of Young Workers," Papers 95-10, Columbia - Graduate School of Business.
  9. Jacob Mincer, 1989. "Human Capital Responses to Technological Change in the Labor Market," NBER Working Papers 3207, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. John A. James & Jonathan S. Skinner, 1984. "The Resolution of the Labor Scarcity Paradox," NBER Working Papers 1504, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Fallon, P R & Layard, P R G, 1975. "Capital-Skill Complementarity, Income Distribution, and Output Accounting," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 279-301, April. [Downloadable!] (restricted)
  12. Steven G. Allen, 1996. "Technology and the Wage Structure," NBER Working Papers 5534, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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