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Steam Power, Establishment Size, and Labor Productivity Growth in Nineteenth Century American Manufacturing

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  • Jeremy Atack
  • Fred Bateman
  • Robert Margo

Abstract

We use establishment level data from the 1850-80 censuses of manufacturing to study the correlates of the use of steam power and the impact of steam power on labor productivity growth in nineteenth century American manufacturing. A key result is that establishment size mattered: large establishments, as measured by employment, were much more likely to use steam power than smaller establishments. Controlling for firm size, location, industry, and other establishment characteristics, steam powered establishments had higher labor productivity than establishments using hand or animal power, or water power. We also find that the impact of steam on labor productivity was increasing in establishment size. The diffusion of steam power was an important factor behind the growth of labor productivity, accounting for 22 to 41 percent of that growth between 1850 and 1880, depending on establishment size.

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  • Jeremy Atack & Fred Bateman & Robert Margo, 2006. "Steam Power, Establishment Size, and Labor Productivity Growth in Nineteenth Century American Manufacturing," NBER Working Papers 11931, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:11931
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    Cited by:

    1. Robert A. Margo, 2014. "Economies of Scale in Nineteenth-Century American Manufacturing Revisited: A Resolution of the Entrepreneurial Labor Input Problem," NBER Chapters,in: Enterprising America: Businesses, Banks, and Credit Markets in Historical Perspective, pages 215-244 National Bureau of Economic Research, Inc.
    2. Svante Prado, 2014. "Yeast or mushrooms? Productivity patterns across Swedish manufacturing industries, 1869–1912," Economic History Review, Economic History Society, vol. 67(2), pages 382-408, May.
    3. Claudia Olivetti, 2014. "The Female Labor Force and Long-Run Development: The American Experience in Comparative Perspective," NBER Chapters,in: Human Capital in History: The American Record, pages 161-197 National Bureau of Economic Research, Inc.
    4. Eric Hilt, 2014. "Corporate Governance and the Development of Manufacturing Enterprises in Nineteenth-Century Massachusetts," NBER Chapters,in: Enterprising America: Businesses, Banks, and Credit Markets in Historical Perspective, pages 73-102 National Bureau of Economic Research, Inc.
    5. Jeremy Atack & Michael R. Haines & Robert A. Margo, 2008. "Railroads and the Rise of the Factory: Evidence for the United States, 1850-70," NBER Working Papers 14410, National Bureau of Economic Research, Inc.
    6. 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.
    7. 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.
    8. 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.
    9. Shih-tse Lo & Dhanoos Sutthiphisal, 2008. "Crossover Inventions And Knowledge Diffusion Of General Purpose Technologies? Evidence From The Electrical Technology," NBER Working Papers 14043, National Bureau of Economic Research, Inc.
    10. James Bessen, 2009. "More Machines, Better Machines...Or Better Workers?," Working Papers 0803, Research on Innovation.
    11. Burton A. Abrams & Jing Li & James G. Mulligan, 2012. "Capital Intensity and U.S. Country Population Growth during the Late Nineteenth Century," Working Papers 12-02, University of Delaware, Department of Economics.

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    JEL classification:

    • N61 - Economic History - - Manufacturing and Construction - - - U.S.; Canada: Pre-1913

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