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Technical Change and the Wage Structure During the Second Industrial Revolution: Evidence from the Merchant Marine, 1865-1912

  • Chin, Aimee

    ()

    (University of Houston)

  • Juhn, Chinhui

    ()

    (University of Houston)

  • Thompson, Peter

    ()

    (Georgia Institute of Technology)

Using a large, individual-level wage data set, we examine the impact of a major technological innovation – the steam engine – on skill demand and the wage structure in the merchant shipping industry. We find that the technical change created a new demand for skilled workers, the engineers, while destroying demand for workers with skills relevant only to sail. It had a deskilling effect on production work – able-bodied seamen (essentially, artisans) were replaced by unskilled engine room operatives. On the other hand, mates and able-bodied seamen employed on steam earned a premium relative to their counterparts on sail. A wholesale switch from sail to steam would increase the 90/10 wage ratio by 40%, with most of the rise in inequality coming from the creation of the engineer occupation.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1285.

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Length: 51 pages
Date of creation: Sep 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1285
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