Steam Power, Establishment Size, and Labor Productivity Growth in Nineteenth Century American Manufacturing

36 Pages Posted: 13 Apr 2006 Last revised: 9 Jul 2012

See all articles by Jeremy Atack

Jeremy Atack

Vanderbilt University - College of Arts and Science - Department of Economics; National Bureau of Economic Research (NBER)

Fred Bateman

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics

Robert A. Margo

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

Date Written: January 2006

Abstract

We use establishment level data from the 1850-80 censuses of manufacturing to study the correlates of the use of steam power and the impact of steam power on labor productivity growth in nineteenth century American manufacturing. A key result is that establishment size mattered: large establishments, as measured by employment, were much more likely to use steam power than smaller establishments. Controlling for firm size, location, industry, and other establishment characteristics, steam powered establishments had higher labor productivity than establishments using hand or animal power, or water power. We also find that the impact of steam on labor productivity was increasing in establishment size. The diffusion of steam power was an important factor behind the growth of labor productivity, accounting for 22 to 41 percent of that growth between 1850 and 1880, depending on establishment size.

Suggested Citation

Atack, Jeremy and Bateman, Fred and Margo, Robert A., Steam Power, Establishment Size, and Labor Productivity Growth in Nineteenth Century American Manufacturing (January 2006). NBER Working Paper No. w11931. Available at SSRN: https://ssrn.com/abstract=876034

Jeremy Atack (Contact Author)

Vanderbilt University - College of Arts and Science - Department of Economics ( email )

Box 1819 Station B
415 Calhoun Hall
Nashville, TN 37235
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615-322-2871 (Phone)
615-343-8495 (Fax)

National Bureau of Economic Research (NBER)

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Fred Bateman

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics ( email )

Athens, GA 30602
United States
706-542-1311 (Phone)
706-542-3376 (Fax)

Robert A. Margo

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States
617-353-6819 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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