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Turbulence, Inequality, and Cheap Steel

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Author Info
Peter B. Meyer () (U.S. Bureau of Labor Statistics)
Abstract

Iron and steel production grew dramatically in the U.S. when mass production technologies for steel were adopted in the 1860s. According to new measures presented in this study, earnings inequality rose within the iron and steel industries about 1870, perhaps because technological uncertainty led to gambles and turbulence. Firms made a variety of technological choices and began formal research and development. Professional associations and journals for mechanical engineers and chemists appeared. A national market replaced local markets for iron and steel. An industrial union replaced craft unions. As new ore sources and cheap water transportation were introduced, new plants along the Great Lakes outcompeted existing plants elsewhere. Because new iron and steel plants in the 1870s were larger than any U.S. plants had ever been, cost accounting appeared in the industry and grew in importance. Uncertainty explains the rise in inequality better than a skill bias account, according to which differences among individuals generate greater differences in wages. Analogous issues of inequality come up with respect to recent information technology.

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Paper provided by U.S. Bureau of Labor Statistics in its series Working Papers with number 375.

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Length: 44 pages
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:bls:wpaper:ec050010

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Related research
Keywords: technological change; Bessemer steel; technological uncertainty; turbulence; inequality; innovation;

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Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
N11 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - U.S.; Canada: Pre-1913
N10 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - General, International, or Comparative
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Peter B. Meyer, 2003. "Episodes of Collective Invention," Working Papers 368, U.S. Bureau of Labor Statistics. [Downloadable!]
  2. Jeremy Atack & Fred Bateman & Robert A. Margo, 2000. "Rising Wage Dispersion Across American Manufacturing Establishments, 1850-1880," Working Papers 0036, Department of Economics, Vanderbilt University. [Downloadable!]
    Other versions:
  3. Rubinstein, Yona & Tsiddon, Daniel, 1999. "Coping with Technological Progress: The Role of Ability in Making Inequality so Persistent," CEPR Discussion Papers 2153, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Francesco Caselli, 1999. "Technological Revolutions," American Economic Review, American Economic Association, vol. 89(1), pages 78-102, March. [Downloadable!] (restricted)
  5. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February. [Downloadable!] (restricted)
  6. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September. [Downloadable!] (restricted)
  7. Feinstein, Charles, 1988. "The Rise and Fall of the Williamson Curve," The Journal of Economic History, Cambridge University Press, vol. 48(03), pages 699-729, September. [Downloadable!]
  8. Michael J. Cooper, 2001. "A Rose.com by Any Other Name," Journal of Finance, American Finance Association, vol. 56(6), pages 2371-2388, December. [Downloadable!] (restricted)
  9. Jeremy Greenwood, 1999. "The Third Industrial Revolution," Economic Review, Federal Reserve Bank of Cleveland, issue Q II, pages 2-12. [Downloadable!]
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  10. Ann P. Bartel & Nachum Sicherman, 1999. "Technological Change and Wages: An Interindustry Analysis," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 285-325, April. [Downloadable!] (restricted)
    Other versions:
  11. Oded Galor & Omer Moav, 1998. "Ability Biased Technological Transition, Wage Inequality, and Economic Growth," Working Papers 98-14, Brown University, Department of Economics.
    Other versions:
  12. Nathan Rosenberg, 1996. "Uncertainty and technological change," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, issue Jun, pages 91-125. [Downloadable!]
  13. Allen, Robert C., 1983. "Collective invention," Journal of Economic Behavior & Organization, Elsevier, vol. 4(1), pages 1-24, March. [Downloadable!] (restricted)
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