Capital-Skill Complementarity and the Emergence of Labor Emancipation

72 Pages Posted: 10 May 2017

See all articles by Quamrul H. Ashraf

Quamrul H. Ashraf

Williams College - Department of Economics

Francesco Cinnirella

University of Southern Denmark - Department of Business and Economics; CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute; Centre for Economic Policy Research (CEPR); CAGE

Oded Galor

Brown University - Department of Economics; Centre for Economic Policy Research (CEPR)

Boris Gershman

American University - Department of Economics

Erik Hornung

University of Cologne - Center for Macroeconomic Research (CMR); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: April 06, 2017

Abstract

This paper advances a novel hypothesis regarding the historical roots of labor emancipation. It argues that the decline of coercive labor institutions in the industrial phase of development has been an inevitable by-product of the intensification of capital-skill complementarity in the production process. In light of the growing significance of skilled labor for fostering the return to physical capital, elites in society were induced to relinquish their historically profitable coercion of labor in favor of employing free skilled workers, thereby incentivizing the masses to engage in broad-based human capital acquisition, without fear of losing their skill premium to expropriation. In line with the proposed hypothesis, exploiting a plausibly exogenous source of variation in early industrialization across regions of nineteenth-century Prussia, capital abundance is shown to have contributed to the subsequent intensity of de facto serf emancipation.

Keywords: labor coercion, serfdom, emancipation, industrialization, physical capital accumulation, capital-skill complementarity, demand for human capital, nineteenth-century Prussia

JEL Classification: J240, J470, N130, N330, O140, O150, O430

Suggested Citation

Ashraf, Quamrul H. and Cinnirella, Francesco and Galor, Oded and Gershman, Boris and Hornung, Erik, Capital-Skill Complementarity and the Emergence of Labor Emancipation (April 06, 2017). CESifo Working Paper Series No. 6423. Available at SSRN: https://ssrn.com/abstract=2965365

Quamrul H. Ashraf

Williams College - Department of Economics ( email )

24 Hopkins Hall Drive
Williamstown, MA 01267
United States
(413) 597-2476 (Phone)
(413) 597-4045 (Fax)

HOME PAGE: http://econ.williams.edu/profile/qha1/

Francesco Cinnirella (Contact Author)

University of Southern Denmark - Department of Business and Economics ( email )

DK-5230 Odense
Denmark

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschingerstrasse 5
Munich, 81679
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

CAGE ( email )

Premier Business Centre
47-49 Park Royal Road
London, NW10 7LQ
United Kingdom

Oded Galor

Brown University - Department of Economics ( email )

Providence, RI 02912
United States

HOME PAGE: http://www.econ.brown.edu/fac/Oded_Galor/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

HOME PAGE: http://www.econ.brown.edu/fac/Oded_Galor/

Boris Gershman

American University - Department of Economics ( email )

4400 Massachusetts Avenue NW
Washington, DC 20016-8029
United States

HOME PAGE: http://nw08.american.edu/~gershman/

Erik Hornung

University of Cologne - Center for Macroeconomic Research (CMR) ( email )

Cologne
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Munich
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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