The Origins of Technology-Skill Complementarity

40 Pages Posted: 27 Dec 2010

See all articles by Claudia Goldin

Claudia Goldin

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

Lawrence F. Katz

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.

Suggested Citation

Goldin, Claudia and Katz, Lawrence F., The Origins of Technology-Skill Complementarity (July 1996). NBER Working Paper No. w5657. Available at SSRN: https://ssrn.com/abstract=1729074

Claudia Goldin (Contact Author)

Harvard University - Department of Economics ( email )

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Lawrence F. Katz

Harvard University - Department of Economics ( email )

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