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Capital-Skill Complementarity and the Emergence of Labor Emancipation

Listed author(s):
  • Boris Gershman
  • Quamrul H. Ashraf
  • Francesco Cinnirella
  • Oded Galor
  • Erik Hornung

This paper advances a novel hypothesis regarding the historical roots of labor emancipation. It argues that the decline of coercive labor institutions in the industrial phase of development has been an inevitable by-product of the intensification of capital-skill complementarity in the production process. In light of the growing significance of skilled labor for fostering the return to physical capital, elites in society were induced to relinquish their historically profitable coercion of labor in favor of employing free skilled workers, thereby incentivizing the masses to engage in broad-based human capital acquisition, without fear of losing their skill premium to expropriation. In line with the proposed hypothesis, exploiting a plausibly exogenous source of variation in early industrialization across regions of nineteenth-century Prussia, capital abundance is shown to have contributed to the subsequent intensity of de facto serf emancipation.

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File URL: http://www.american.edu/cas/economics/research/upload/2017-04.pdf
File Function: First version, 2017
Download Restriction: no

Paper provided by American University, Department of Economics in its series Working Papers with number 2017-04.

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Date of creation: 2017
Handle: RePEc:amu:wpaper:2017-04
Contact details of provider: Web page: http://www.american.edu/cas/economics/

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  1. Bertocchi, Graziella & Dimico, Arcangelo, 2014. "Slavery, education, and inequality," European Economic Review, Elsevier, vol. 70(C), pages 197-209.
  2. James Fenske, 2013. "Does Land Abundance Explain African Institutions?," Economic Journal, Royal Economic Society, vol. 123(12), pages 1363-1390, December.
  3. Alan Fernihough & Kevin Hjorstshøj O’Rourke, 2014. "Coal and the European Industrial Revolution," Oxford University Economic and Social History Series _124, Economics Group, Nuffield College, University of Oxford.
  4. Oded Galor, 2011. "Unified Growth Theory and Comparative Development," Rivista di Politica Economica, SIPI Spa, issue 2, pages 9-21, April-Jun.
  5. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
  6. Theresa Gutberlet, 2014. "Mechanization and the spatial distribution of industries in the German Empire, 1875 to 1907," Economic History Review, Economic History Society, vol. 67(2), pages 463-491, May.
  7. Oded Galor, 2011. "Unified Growth Theory," Economics Books, Princeton University Press, edition 1, number 9477, March.
  8. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 143-179.
  9. Eddie, Scott M., 2008. "Landownership in Eastern Germany Before the Great War: A Quantitative Analysis," OUP Catalogue, Oxford University Press, number 9780198201663.
  10. Markevich, Andrei & Zhuravskaya, Ekaterina, 2015. "Economic Effects of the Abolition of Serfdom: Evidence from the Russian Empire," CEPREMAP Working Papers (Docweb) 1502, CEPREMAP.
  11. Mara P. Squicciarini & Nico Voigtländer, 2015. "Human Capital and Industrialization: Evidence from the Age of Enlightenment," The Quarterly Journal of Economics, Oxford University Press, vol. 130(4), pages 1825-1883.
  12. Sascha Becker & Francesco Cinnirella & Ludger Woessmann, 2010. "The trade-off between fertility and education: evidence from before the demographic transition," Journal of Economic Growth, Springer, vol. 15(3), pages 177-204, September.
  13. Buggle, Johannes C., 2016. "Law and social capital: Evidence from the Code Napoleon in Germany," European Economic Review, Elsevier, vol. 87(C), pages 148-175.
  14. Fenoaltea, Stefano, 1984. "Slavery and Supervision in Comparative Perspective: A Model," The Journal of Economic History, Cambridge University Press, vol. 44(03), pages 635-668, September.
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