Tasks and Technology in the United States 1880-2000

Guy Michaels, Ferdinand Rauch, Stephen J. Redding

NBER Working Paper No. 18715
Issued in January 2013
NBER Program(s):   ITI

We provide theory and evidence on changes in task inputs in the United States from 1880-2000. We combine a Roy model of worker selection across occupations with a new methodology for measuring individual production tasks performed by workers within occupations. We show that the recently-documented rise in non-routine tasks and decline in manual tasks extends much further back than hitherto thought to the late-nineteenth century. We reveal substantial heterogeneity within these broad categories of tasks, with those involving the formation of ideas increasing by up to twice the growth for non-routine tasks as a whole, and those involving the manipulation of inorganic matter decreasing by nearly twice the overall decline for manual tasks. We establish that these changes in task inputs are explained by new technologies (in particular office and computing machinery) and are larger in urban than in rural areas (implying a transformation in the nature of agglomeration). We show that changes in the wage premia for tasks can account for a substantial proportion of the decline in wage inequality from 1880-1940, the rise in wage inequality from 1940-2000, and the larger rise in wage inequality in urban areas than in rural areas, even after controlling for observed worker characteristics.

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This paper was revised on February 18, 2016

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Document Object Identifier (DOI): 10.3386/w18715

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