The Evolution of Work

40 Pages Posted: 29 Nov 2006 Last revised: 9 Sep 2022

See all articles by Markus M. Mobius

Markus M. Mobius

Microsoft Corporation - Microsoft Research New England; University of Michigan at Ann Arbor - School of Information; National Bureau of Economic Research (NBER)

Raphael Schoenle

Brandeis University

Date Written: November 2006

Abstract

The division of labor first increased during industrialization and then decreased again after 1970 as job roles have expanded. We explain these trends in the organization of work through a simple model where (a) machines require standardization to exploit economies of scale and (b) more customized products are subject to trends and fashions which make production tasks less predictable and a strict division of labor impractical. At the onset of industrialization, the market supports only a small number of generic varieties which can be mass-produced under a strict division of labor. Thanks to productivity growth, niche markets gradually expand, producers eventually move into customized production and the division of labor decreases again. The model predicts capital-skill substitutability during industrialization and capital skill complementarity in the maturing industrial economy. Moreover, conventional calculations of the factor content of trade underestimate the impact of globalization because they do not take into account changes in product market competition induced by trade. We test our model by exploiting the time-lags in the introduction of bar-coding in three-digit SIC manufacturing industries in the US. We find that both increases in investments in computers and bar-coding have led to skill-upgrading. However, consistent with our model bar-coding has affected mainly the center of the skill distribution by shifting demand away from the high-school educated to the less-than-college educated.

Suggested Citation

Mobius, Markus M. and Mobius, Markus M. and Schoenle, Raphael, The Evolution of Work (November 2006). NBER Working Paper No. w12694, Available at SSRN: https://ssrn.com/abstract=944182

Markus M. Mobius (Contact Author)

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Raphael Schoenle

Brandeis University ( email )

Waltham, MA 02454
United States

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