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The Origins of Technology-Skill Complementarity

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  • Claudia Goldin
  • Lawrence F. Katz

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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  1. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-68, November.
  2. Ernst R. Berndt & Catherine J. Morrison & Larry S. Rosenblum, 1992. "High-Tech Capital Formation and Labor Composition in U.S. Manufacturing Industries: An Exploratory Analysis," NBER Working Papers 4010, National Bureau of Economic Research, Inc.
  3. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
  4. James, John A. & Skinner, Jonathan S., 1985. "The Resolution of the Labor-Scarcity Paradox," The Journal of Economic History, Cambridge University Press, vol. 45(03), pages 513-540, September.
  5. David H. Autor, 2001. "Wiring the Labor Market," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 25-40, Winter.
  6. 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.
  7. Steven G. Allen, 1996. "Technology and the Wage Structure," NBER Working Papers 5534, National Bureau of Economic Research, Inc.
  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. Daniel Creamer & Sergei Dobrovolsky & Israel Borenstein, 1960. "Capital in Manufacturing and Mining: Its Formation and Financing," NBER Books, National Bureau of Economic Research, Inc, number crea60-1, October.
  10. Ann P. Bartel & Nachum Sicherman, 1995. "Technological Change and the Skill Acquisition of Young Workers," NBER Working Papers 5107, National Bureau of Economic Research, Inc.
  11. Devine, Warren D., 1983. "From Shafts to Wires: Historical Perspective on Electrification," The Journal of Economic History, Cambridge University Press, vol. 43(02), pages 347-372, June.
  12. Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc.
  13. Kenneth L. Sokoloff, 1986. "Productivity Growth in Manufacturing during Early Industrialization: Evidence from the American Northeast, 1820-1860," NBER Chapters, in: Long-Term Factors in American Economic Growth, pages 679-736 National Bureau of Economic Research, Inc.
  14. 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.
  15. Jacob Mincer, 1989. "Human Capital Responses to Technological Change in the Labor Market," NBER Working Papers 3207, National Bureau of Economic Research, Inc.
  16. repec:fth:coluec:455 is not listed on IDEAS
  17. 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.
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