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People and Machines: A Look at the Evolving Relationship between Capital and Skill in Manufacturing 1860-1930 Using Immigration Shocks

SSRN Electronic Journal
  • 17
    Citations
  • 908
    Usage
  • 6
    Captures
  • 0
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    17
    • Citation Indexes
      17
  • Usage
    908
    • Abstract Views
      813
    • Downloads
      95
  • Captures
    6
  • Ratings
    • Download Rank
      569,904

Article Description

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.

Bibliographic Details

Jeanne Lafortune; Jose Tessada; Ethan G. Lewis

Elsevier BV

manufacturing; skill-biased technical change; capital-skill complementarity; immigration; Second Industrial Revolution

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