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Taking Technology to Task: The Skill Content of Technological Change in Early Twentieth Century United States

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  • Rowena Gray

    () (University of Essex, UK)

Abstract

This paper presents a new picture of the labor market effects of technological change in pre-WWII United States. I show that, similar to the recent computerization episode, the electrification of the manufacturing sector led to a "hollowing out" of the skill distribution whereby workers in the middle of the distribution lost out to those at the extremes. To conduct this analysis, a new dataset detailing the task composition of occupations in the United States for the period 1880-1940 was constructed using information about the task content of over 4,000 occupations from the Dictionary of Occupational Titles (1949). This unique data was used to measure the skill content of electrification in U.S. manufacturing. OLS estimates show that electrification increased the demand for clerical, numerical, planning and people skills relative to manual skills while simultaneously reducing relative demand for the dexterity-intensive jobs which comprised the middle of the skill distribution. Thus, early twentieth century technological change was unskill-biased for blue collar tasks but skill-biased on aggregate. These results are in line with the downward trend in wage differentials within U.S. manufacturing up to 1950. To overcome any threat to the exogeneity of the electricity measure, due for example to endogenous technological change, 2 instrumental variable strategies were developed. The first uses cross-state differences in the timing of adoption of state-level utility regulation while the second exploits differences in state-level geography that encouraged the development of hydro-power generation and thus made electricity cheaper. The results from these regressions support the main conclusions of the paper.

Suggested Citation

  • Rowena Gray, 2011. "Taking Technology to Task: The Skill Content of Technological Change in Early Twentieth Century United States," Working Papers 0009, European Historical Economics Society (EHES).
  • Handle: RePEc:hes:wpaper:0009
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Electrification, skills and manufacturing
      by Chris Colvin in NEP-HIS blog on 2012-01-29 00:15:01

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    Cited by:

    1. Consoli, Davide & Marin, Giovanni & Marzucchi, Alberto & Vona, Francesco, 2016. "Do green jobs differ from non-green jobs in terms of skills and human capital?," Research Policy, Elsevier, vol. 45(5), pages 1046-1060.
    2. Jeanne Lafortune & José Tessada & Ethan Lewis, 2015. "People and Machines A Look at the Evolving Relationship Between Capital and Skill In Manufacturing 1860-1930 Using Immigration Shocks," Documentos de Trabajo 463, Instituto de Economia. Pontificia Universidad Católica de Chile..
    3. Xie, Bin, 2017. "The Effects of Immigration Quotas on Wages, the Great Black Migration, and Industrial Development," IZA Discussion Papers 11214, Institute for the Study of Labor (IZA).
    4. Graetz, Georg & Feng, Andy, 2014. "Rise of the Machines: The Effects of Labor-Saving Innovations on Jobs and Wages," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100401, Verein für Socialpolitik / German Economic Association.
    5. Guy Michaels & Ferdinand Rauch & Stephen J. Redding, 2013. "Task Specialization in U.S. Cities from 1880-2000," CEP Discussion Papers dp1186, Centre for Economic Performance, LSE.
    6. Davide Consoli & Francesco Vona & Francesco Rentocchini, 2016. "That was then, this is now: skills and routinization in the 2000s," Industrial and Corporate Change, Oxford University Press, vol. 25(5), pages 847-866.
    7. Frey, Carl Benedikt & Osborne, Michael A., 2017. "The future of employment: How susceptible are jobs to computerisation?," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 254-280.
    8. Miguel Morin, 2015. "The Labor Market Consequences of Electricity Adoption: Concrete Evidence from the Great Depression," Cambridge Working Papers in Economics 1554, Faculty of Economics, University of Cambridge.
    9. Zachary Ward, 2016. "The Role of English Fluency in Migrant Assimilation: Evidence from United States History," CEH Discussion Papers 049, Centre for Economic History, Research School of Economics, Australian National University.
    10. Davide Consoli & Mabel Sánchez-Barrioluengo, 2016. "Polarization and the growth of low-skill employment in Spanish Local Labor Markets," Papers in Evolutionary Economic Geography (PEEG) 1628, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2016.

    More about this item

    Keywords

    Technological change; skill bias;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913

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