IDEAS home Printed from https://ideas.repec.org/p/hes/wpaper/0009.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://ehes.org/wp/EHES_No9.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mitchener, Kris James & McLean, Ian W., 1999. "U.S.Regional Growth And Convergence, 1880–1980," The Journal of Economic History, Cambridge University Press, vol. 59(4), pages 1016-1042, December.
    2. Daron Acemoglu, 1999. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," American Economic Review, American Economic Association, vol. 89(5), pages 1259-1278, December.
    3. Giovanni Peri & Chad Sparber, 2016. "Task Specialization, Immigration, and Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 3, pages 81-115 World Scientific Publishing Co. Pte. Ltd..
    4. Guy Michaels & Ferdinand Rauch & Stephen J Redding, 2019. "Task Specialization in U.S. Cities from 1880 to 2000," Journal of the European Economic Association, European Economic Association, vol. 17(3), pages 754-798.
    5. Sandra E. Black & Alexandra Spitz-Oener, 2010. "Explaining Women's Success: Technological Change and the Skill Content of Women's Work," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 187-194, February.
    6. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    7. Alexander James Field, 1980. "Industrialization and Skill Intensity: The Case of Massachusetts," Journal of Human Resources, University of Wisconsin Press, vol. 15(2), pages 149-175.
    8. Mobarak, Ahmed & Lipscomb, Molly & Barham, Tania, 2011. "Development Effects of Electrification: Evidence from the Geologic Placement of Hydropower Plants in Brazil," CEPR Discussion Papers 8427, C.E.P.R. Discussion Papers.
    9. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2006. "The Polarization of the U.S. Labor Market," American Economic Review, American Economic Association, vol. 96(2), pages 189-194, May.
    10. Aimee Chin & Chinhui Juhn & Peter Thompson, 2006. "Technical Change and the Demand for Skills during the Second Industrial Revolution: Evidence from the Merchant Marine, 1891-1912," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 572-578, August.
    11. Atack, Jeremy & Bateman, Fred, 1992. "How Long Was the Workday in 1880?," The Journal of Economic History, Cambridge University Press, vol. 52(1), pages 129-160, March.
    12. Jovanovic, Boyan & Rousseau, Peter L., 2005. "General Purpose Technologies," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 18, pages 1181-1224, Elsevier.
    13. Hausman, William J. & Neufeld, John L., 2002. "The Market for Capital and the Origins of State Regulation of Electric Utilities in the United States," The Journal of Economic History, Cambridge University Press, vol. 62(4), pages 1050-1073, December.
    14. Lawrence F. Katz & Robert A. Margo, 2014. "Technical Change and the Relative Demand for Skilled Labor: The United States in Historical Perspective," NBER Chapters, in: Human Capital in History: The American Record, pages 15-57, National Bureau of Economic Research, Inc.
    15. Marina Adshade & Ian Keay, 2010. "Technological and Organizational Change and the Employment of Women: Early Twentieth-Century Evidence from the Ohio Manufacturing Sector," Feminist Economics, Taylor & Francis Journals, vol. 16(1), pages 129-157.
    16. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1055-1089.
    17. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    18. Christopher R. Knittel, 2006. "The Adoption Of State Electricity Regulation: The Role Of Interest Groups," Journal of Industrial Economics, Wiley Blackwell, vol. 54(2), pages 201-222, June.
    19. Harry Jerome, 1934. "Mechanization in Industry," NBER Books, National Bureau of Economic Research, Inc, number jero34-1, October.
    20. Giovanni Peri & Chad Sparber, 2016. "Task Specialization, Immigration, and Wages," World Scientific Book Chapters, in: The Economics of International Migration, chapter 3, pages 81-115, World Scientific Publishing Co. Pte. Ltd..
    21. Atack, Jeremy & Bateman, Fred & Margo, Robert A., 2004. "Skill Intensity and Rising Wage Dispersion in Nineteenth-Century American Manufacturing," The Journal of Economic History, Cambridge University Press, vol. 64(1), pages 172-192, March.
    22. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    23. Stephen Machin & John Van Reenen, 1998. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1215-1244.
    24. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins of Technology-Skill Complementarity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 693-732.
    25. Ewan Clague & W. J. Couper, 1931. "The Readjustment of Workers Displaced by Plant Shutdowns," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 45(2), pages 309-346.
    26. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1169-1213.
    27. Sundstrom, William A., 1994. "The Color Line: Racial Norms and Discrimination in Urban Labor Markets, 1910–1950," The Journal of Economic History, Cambridge University Press, vol. 54(2), pages 382-396, June.
    28. Whaples, Robert, 1990. "Winning the Eight-Hour Day, 1909–1919," The Journal of Economic History, Cambridge University Press, vol. 50(2), pages 393-406, June.
    29. Robert J. Myers, 1929. "Occupational Readjustment of Displaced Skilled Workmen," Journal of Political Economy, University of Chicago Press, vol. 37(4), pages 473-473.
    30. Stiles P. Jones, 1914. "State Versus Local Regulation," The ANNALS of the American Academy of Political and Social Science, , vol. 53(1), pages 94-107, May.
    31. Margo, Robert A, 1986. "Race and Human Capital: Comment," American Economic Review, American Economic Association, vol. 76(5), pages 1221-1224, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carlos Medina & Christian Posso, 2010. "Technical Change and Polarization of the Labor Market: Evidence for Brazil, Colombia and Mexico," Borradores de Economia 614, Banco de la Republica de Colombia.
    2. Lewis, Ethan & Peri, Giovanni, 2015. "Immigration and the Economy of Cities and Regions," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 625-685, Elsevier.
    3. Giovanni Peri & Kevin Shih & Chad Sparber, 2016. "STEM Workers, H-1B Visas, and Productivity in US Cities," World Scientific Book Chapters, in: The Economics of International Migration, chapter 9, pages 277-307, World Scientific Publishing Co. Pte. Ltd..
    4. Tan, Joanne, 2024. "Multidimensional heterogeneity and matching in a frictional labor market — An application to polarization," Labour Economics, Elsevier, vol. 90(C).
    5. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    6. 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.
    7. Hynninen, Sanna-Mari & Ojala, Jari & Pehkonen, Jaakko, 2013. "Technological change and wage premiums: Historical evidence from linked employer–employee data," Labour Economics, Elsevier, vol. 24(C), pages 1-11.
    8. Giovanni Peri & Kevin Y. Shih & Chad Sparber, 2014. "Foreign STEM Workers and Native Wages and Employment in U.S. Cities," NBER Working Papers 20093, National Bureau of Economic Research, Inc.
    9. Fonseca, Tiago & Lima, Francisco & Pereira, Sonia C., 2018. "Understanding productivity dynamics: A task taxonomy approach," Research Policy, Elsevier, vol. 47(1), pages 289-304.
    10. Castro Silva, Hugo & Lima, Francisco, 2017. "Technology, employment and skills: A look into job duration," Research Policy, Elsevier, vol. 46(8), pages 1519-1530.
    11. David Hémous & Morten Olsen, 2022. "The Rise of the Machines: Automation, Horizontal Innovation, and Income Inequality," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(1), pages 179-223, January.
    12. Borghans, Lex & Weel, Bas ter, 2001. "What happens when agent T gets a computer?," Research Memorandum 017, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    13. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Trends in U. S. Wage Inequality: Re-Assessing the Revisionists," Harvard Institute of Economic Research Working Papers 2095, Harvard - Institute of Economic Research.
    14. Borghans, Lex & Weel, Bas ter, 2001. "What happens when agent T gets a computer?," Research Memorandum 017, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    15. Haas, Anette & Lucht, Michael & Schanne, Norbert, 2013. "Why to employ both migrants and natives? A study on task-specific substitutability," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 46(3), pages 201-214.
    16. Nancy L. Stokey, 2018. "Technology and Skill: Twin Engines of Growth," NBER Working Papers 24570, National Bureau of Economic Research, Inc.
    17. Fonseca, Tiago & Lima, Francisco & Pereira, Sonia C., 2018. "Job polarization, technological change and routinization: Evidence for Portugal," Labour Economics, Elsevier, vol. 51(C), pages 317-339.
    18. Nancy Stokey, 2021. "Technology and Skill: Twin Engines of Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 40, pages 12-43, April.
    19. Grant Gannaway & Craig Palsson & Joseph Price & David Sims, 2014. "Technological Change, Relative Worker Productivity, and Firm-Level Substitution," Journal of Sports Economics, , vol. 15(5), pages 478-496, October.
    20. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hes:wpaper:0009. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Paul Sharp (email available below). General contact details of provider: https://edirc.repec.org/data/ehessea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.