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Technological change and wage premiums: Historical evidence from linked employer–employee data

  • Hynninen, Sanna-Mari
  • Ojala, Jari
  • Pehkonen, Jaakko
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    This study analyses the impacts of a technological change (the steam engine) on wage premiums. Using historical employer–employee panel data, we found that steam technology had both new skill-demanding and skill-replacing aspects. The former manifested itself as an increase in the demand for high-skilled engineers, the latter in a decline in the demand for intermediate-skilled, able-bodied seamen and an increase in the demand for unskilled engine room operators. Our panel data analysis, which controls for unobserved heterogeneity, implies that high-skilled labourers in abstract tasks and unskilled labourers in manual tasks improved their wage positions relative to intermediate-skilled labourers in routine tasks. These findings are compatible with the hypothesis of technology-based polarisation.

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    Article provided by Elsevier in its journal Labour Economics.

    Volume (Year): 24 (2013)
    Issue (Month): C ()
    Pages: 1-11

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    Handle: RePEc:eee:labeco:v:24:y:2013:i:c:p:1-11
    Contact details of provider: Web page: http://www.elsevier.com/locate/labeco

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