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

  • Jeremy Atack
  • Fred Bateman
  • Robert Margo

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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11931.

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Date of creation: Jan 2006
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Publication status: published as Atack, Jeremy, Fred Bateman, and Robert Margo. “Steam Power, Establishment Size, and Labor Productivity Growth in Nineteenth Century American Manufacturing.” Explorations in Economic History 45, 2 (April 2008): 185-98.
Handle: RePEc:nbr:nberwo:11931
Note: DAE PR
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  1. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins Of Technology-Skill Complementarity," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 693-732, August.
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  4. Kim, Sukkoo, 2004. "Industrialization and Urbanization: Did the Steam Engine Contribute to the Growth of Cities in the United States?," Institute of European Studies, Working Paper Series qt4hd75171, Institute of European Studies, UC Berkeley.
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  6. Robert E. Gallman, 1986. "The United States Capital Stock in the Nineteenth Century," NBER Chapters, in: Long-Term Factors in American Economic Growth, pages 165-214 National Bureau of Economic Research, Inc.
  7. Jeremy Atack & Fred Bateman & Robert A. Margo, 2001. "Part-Year Operation in Nineteenth Century American Manufacturing: Evidence from the 1870 and 1880 Censuses," Vanderbilt University Department of Economics Working Papers 0106, Vanderbilt University Department of Economics, revised Mar 2001.
  8. Kim, Sukkoo, 2005. "Industrialization and urbanization: Did the steam engine contribute to the growth of cities in the United States?," Explorations in Economic History, Elsevier, vol. 42(4), pages 586-598, October.
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  12. Jeremy Atack & Fred Bateman & Robert A. Margo, 2003. "Capital Deepening in American Manufacturing, 1850-1880," NBER Working Papers 9923, National Bureau of Economic Research, Inc.
  13. Rosenberg, Nathan & Trajtenberg, Manuel, 2004. "A General-Purpose Technology at Work: The Corliss Steam Engine in the Late-Nineteenth-Century United States," The Journal of Economic History, Cambridge University Press, vol. 64(01), pages 61-99, March.
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  15. Atack, Jeremy & Bateman, Fred & Weiss, Thomas, 1980. "The Regional Diffusion and Adoption of the Steam Engine in American Manufacturing," The Journal of Economic History, Cambridge University Press, vol. 40(02), pages 281-308, June.
  16. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
  17. 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(01), pages 172-192, March.
  18. Broadberry, S. N., 1997. "Anglo-German productivity differences 1870 1990: A sectoral analysis," European Review of Economic History, Cambridge University Press, vol. 1(02), pages 247-267, August.
  19. Kenneth L. Sokoloff, 1986. "Productivity Growth in Manufacturing during Early Industrialization: Evidence from the American Northeast, 1820-1860," NBER Chapters, in: Long-Term Factors in American Economic Growth, pages 679-736 National Bureau of Economic Research, Inc.
  20. David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, vol. 80(2), pages 355-61, May.
  21. Jeremy Atack & Fred Bateman & Robert A. Margo, 2005. "Capital deepening and the rise of the factory: the American experience during the nineteenth century -super-1 ," Economic History Review, Economic History Society, vol. 58(3), pages 586-595, 08.
  22. Halsey, Harlan I., 1981. "The Choice Between High-Pressure and Low-Pressure Steam Power in America in the Early Nineteenth Century," The Journal of Economic History, Cambridge University Press, vol. 41(04), pages 723-744, December.
  23. Atack, Jeremy, 1979. "Fact in fiction? The relative costs of steam and water power: a simulation approach," Explorations in Economic History, Elsevier, vol. 16(4), pages 409-437, October.
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