Technical Change and the Wage Structure During the Second Industrial Revolution: Evidence from the Merchant Marine, 1865-1912

Chin, Aimee; Juhn, Chinhui; Thompson, Peter

Technical Change and the Wage Structure During the Second Industrial Revolution: Evidence from the Merchant Marine, 1865-1912

51 Pages Posted: 6 Sep 2004

See all articles by Aimee Chin

Aimee Chin

University of Houston - Department of Economics

Chinhui Juhn

University of Houston - Department of Economics; IZA Institute of Labor Economics

Peter Thompson

Georgia Institute of Technology - Scheller College of Business

There are 2 versions of this paper

Date Written: September 2004

Abstract

Using a large, individual-level wage data set, we examine the impact of a major technological innovation - the steam engine - on skill demand and the wage structure in the merchant shipping industry. We find that the technical change created a new demand for skilled workers, the engineers, while destroying demand for workers with skills relevant only to sail. It had a deskilling effect on production work - able-bodied seamen (essentially, artisans) were replaced by unskilled engine room operatives. On the other hand, mates and able-bodied seamen employed on steam earned a premium relative to their counterparts on sail. A wholesale switch from sail to steam would increase the 90/10 wage ratio by 40%, with most of the rise in inequality coming from the creation of the engineer occupation.

Keywords: wage inequality, skill premium, skill-biased technical change

JEL Classification: I21, J62, H52

Suggested Citation: Suggested Citation

Chin, Aimee Y. and Juhn, Chinhui and Thompson, Peter, Technical Change and the Wage Structure During the Second Industrial Revolution: Evidence from the Merchant Marine, 1865-1912 (September 2004). Available at SSRN: https://ssrn.com/abstract=586802