Full Citation

Title: People and Machines: A Look at the Evolving Relationship between Capital and Skill in Manufacturing, 18601930, Using Immigration Shocks

Citation Type: Journal Article

Publication Year: 2019

ISBN:

ISSN: 15309142

DOI: 10.1162/rest_a_00775

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Abstract: This paper estimates the elasticity of substitution between capital and skill in manufacturing using immigration-induced variation in skill mix across U.S. counties between 1860 and 1930. We find that capital initially complemented both high-And low-skill labor (determined by literacy) and, unlike today, was more complementary with low-skill labor. Around 1890, capital increased its relative complementarity with high-skill labor. Simulations calibrated to our estimates imply the level of capital-skill complementarity after 1890 allowed the manufacturing sector to absorb the large wave of Eastern and Southern European immigrants with only a modest decline in less-skilled relative wages. This would not have been possible under the older production technology.

Url: https://www.mitpressjournals.org/doi/abs/10.1162/rest_a_00775

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

Periodical (Full): Review of Economics and Statistics

Issue: 1

Volume: 101

Pages: 30-43

Data Collections: IPUMS USA

Topics: Migration and Immigration

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