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Technical Change and the Wage Structure During the Second Industrial Revolution: Evidence from the Merchant Marine, 1865-1912

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Author Info
Chinhui Juhn () (Department of Economics, University of Houston)
Aimee Chin () (Department of Economics, University of Houston)
Peter Thompson () (Department of Economics, Florida International University)

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Abstract

Using a large, individual-level wage data set, we examine the impact of a major technological innovation—the steam engine—on skill demand and the wage structure in the merchant shipping industry. We find that the technical change created a new demand for skilled workers, the engineers, while destroying demand for workers with skills relevant only to sail. It had a deskilling effect on production work—able-bodied seamen (essentially, artisans) were replaced by unskilled engine room operatives. On the other hand, mates and able-bodied seamen employed on steam earned a premium relative to their counterparts on sail. A wholesale switch from sail to steam would increase the 90/10 wage ratio by 40%, with most of the rise in inequality coming from the creation of the engineer occupation.

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Paper provided by Department of Economics, University of Houston in its series Working Papers with number 2004-03.

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Length: 49 pages
Date of creation: Aug 2004
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Handle: RePEc:hou:wpaper:2004-03

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Postal: Houston TX 77023
Web page: http://www.uh.edu/academics/sos/econ/
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Find related papers by JEL classification:
I20 - Health, Education, and Welfare - - Education - - - General
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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