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Title: People and Machines A Look at the Evolving Relationship Between Capital and Skill In Manufacturing 1860-1930 Using Immigration Shocks

Citation Type: Working Paper

Publication Year: 2015

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Abstract: This paper estimates the elasticity of substitution between capital and skill using variation across U.S. counties in immigration-induced skill-mix changes between 1860 and 1930. We find that capital began as a q-complement for skilled and unskilled workers, and then dra- matically increased its relative complementary with skilled workers around 1890. Simulations of a parametric production function calibrated to our estimates imply the level of capital-skill complementarity after 1890 likely allowed the U.S. economy to absorb the large wave of less- skilled immigration with a modest decline in less-skilled relative wages. This would not have been possible under the older production technology.

Url: http://economia.uc.cl/docs/dt_463.pdf

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Authors: Lafortune, Jeanne; Tessada, José; Lewis, Ethan

Series Title: Instituto de Economia Documento de Trabajo

Publication Number: 463

Institution: Instituto de Economica

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Data Collections: IPUMS USA

Topics: Migration and Immigration

Countries: United States