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The Origins of Technology-Skill Complementarity

Listed author(s):
  • Goldin, Claudia D.
  • Katz, Lawrence F.

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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File URL: http://dash.harvard.edu/bitstream/handle/1/27867130/SSRN-id1729074.pdf
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Paper provided by Harvard University Department of Economics in its series Scholarly Articles with number 27867130.

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Date of creation: 1998
Publication status: Published in The Quarterly Journal of Economics
Handle: RePEc:hrv:faseco:27867130
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Web page: http://www.economics.harvard.edu/

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  7. Claudia Goldin, 1994. "How America Graduated from High School: 1910 to 1960," NBER Working Papers 4762, National Bureau of Economic Research, Inc.
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