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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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  • Chin, Aimee

    (University of Houston)

  • Juhn, Chinhui

    (University of Houston)

  • Thompson, Peter

    (Georgia Institute of Technology)

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.

Suggested Citation

  • Chin, Aimee & Juhn, Chinhui & Thompson, Peter, 2004. "Technical Change and the Wage Structure During the Second Industrial Revolution: Evidence from the Merchant Marine, 1865-1912," IZA Discussion Papers 1285, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1285
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    Cited by:

    1. Mohajan, Haradhan, 2019. "The Second Industrial Revolution has Brought Modern Social and Economic Developments," MPRA Paper 98209, University Library of Munich, Germany, revised 26 Dec 2019.

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    More about this item

    Keywords

    wage inequality; skill premium; skill-biased technical change;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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