TY  - JOUR
AU  - Mobius,Markus
AU  - Schoenle,Raphael
TI  - The Evolution of Work
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12694
PY  - 2006
Y2  - November 2006
UR  - http://www.nber.org/papers/w12694
L1  - http://www.nber.org/papers/w12694.pdf
N1  - Author contact info:
Markus Mobius
Department of Economics
Iowa State University
460A Heady Hall
Ames, IA 50011
Tel: (515) 257-6233
Fax: (515) 294-0221
E-Mail: mobius@fas.harvard.edu

Raphael Schoenle
Brandeis University
Department of Economics
Mail Stop 021
415 South Street
Waltham, MA 02454
http://people.brandeis.edu/~schoenle/
E-Mail: schoenle@brandeis.edu
AB  - The division of labor first increased during industrialization and then decreased again after 1970 as job roles have expanded. We explain these trends in the organization of work through a simple model where (a) machines require standardization to exploit economies of scale and (b) more customized products are subject to trends and fashions which make production tasks less predictable and a strict division of labor impractical. At the onset of industrialization, the market supports only a small number of generic varieties which can be mass-produced under a strict division of labor. Thanks to productivity growth, niche markets gradually expand, producers eventually move into customized production and the division of labor decreases again. The model predicts capital-skill substitutability during industrialization and capital skill complementarity in the maturing industrial economy. Moreover, conventional calculations of the factor content of trade underestimate the impact of globalization because they do not take into account changes in product market competition induced by trade. We test our model by exploiting the time-lags in the introduction of bar-coding in three-digit SIC manufacturing industries in the US. We find that both increases in investments in computers and bar-coding have led to skill-upgrading. However, consistent with our model bar-coding has affected mainly the center of the skill distribution by shifting demand away from the high-school educated to the less-than-college educated.
ER  -