People and Machines: A Look at the Evolving Relationship Between Capital and Skill in Manufacturing 1860-1930 Using Immigration Shocks
This paper estimates the elasticity of substitution between capital and skill using variation across U.S. counties in immigration-induced skill-mix changes between 1860 and 1930. We find that capital began as a q-complement for skilled and unskilled workers, and then dramatically increased its relative complementary with skilled workers around 1890. Simulations of a parametric production function calibrated to our estimates imply the level of capital-skill complementarity after 1890 likely allowed the U.S. economy to absorb the large wave of less-skilled immigration with a modest decline in less-skilled relative wages. This would not have been possible under the older production technology.
Year of publication: |
2015
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Authors: | Lafortune, Jeanne ; Tessada, José ; Lewis, Ethan Gatewood |
Publisher: |
Bonn : Institute for the Study of Labor (IZA) |
Subject: | immigration | capital-skill complementarity | skill-biased technical change | manufacturing | Second Industrial Revolution |
Saved in:
freely available
Series: | IZA Discussion Papers ; 9217 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 833335987 [GVK] hdl:10419/114096 [Handle] RePEc:iza:izadps:dp9217 [RePEc] |
Classification: | J24 - Human Capital; Skills; Occupational Choice; Labor Productivity ; N61 - U.S.; Canada: Pre-1913 ; O33 - Technological Change: Choices and Consequences; Diffusion Processes |
Source: |
Persistent link: https://www.econbiz.de/10011307433