The Origins of Technology-Skill Complementarity

40 Pages Posted: 24 Oct 1996

See all articles by Lawrence F. Katz

Lawrence F. Katz

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Claudia Goldin

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: July 1996

Abstract

Current concern with relationships among particular technologies, capital and the wage structure motivates this study of the origins of technology-skill complementarity in manufacturing. We offer evidence of the existence of technology-skill and capital-skill (relative) complementarities from 1909 to 1929 and suggest that they were associated with continuous-process and batch methods and the adoption of electric motors. Industries that used more capital per worker and a greater proportion of their horsepower in the form of purchased electricity employed relatively more educated blue-collar workers in 1940 and paid their blue-collar workers substantially more from 1909 to 1929. We also infer capital-skill complementarity using the wage-bill for non-production workers and find that the relationship was as large from 1909-19 as it has been recently. Finally, we link our findings to those on the high- school movement (1910 to 1940). The rapid increase in the supply of skills from 1910 to 1940 may have prevented rising inequality with technological change.

JEL Classification: J31, N32, L23

Suggested Citation

Katz, Lawrence F. and Goldin, Claudia, The Origins of Technology-Skill Complementarity (July 1996). Available at SSRN: https://ssrn.com/abstract=1537 or http://dx.doi.org/10.2139/ssrn.1537

Lawrence F. Katz (Contact Author)

Harvard University - Department of Economics ( email )

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Claudia Goldin

Harvard University - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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