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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
Chin, Aimee (University of Houston)
Juhn, Chinhui () (University of Houston and IZA Bonn)
Thompson, Peter (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 ablebodied 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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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1285.

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Length: 51 pages
Date of creation: Sep 2004
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Handle: RePEc:iza:izadps:dp1285

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Related research
Keywords: wage inequality; skill premium; skill-biased technical change;

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Find related papers by JEL classification:
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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