NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

People and Machines: A Look at the Evolving Relationship Between Capital and Skill In Manufacturing 1860-1930 Using Immigration Shocks

Jeanne Lafortune, José Tessada, Ethan Lewis

NBER Working Paper No. 21435
Issued in July 2015
NBER Program(s):The Program on the Development of the American Economy, The Labor Studies Program

This paper estimates the elasticity of substitution between capital and skill using variation across U.S. counties in immigration-induced skill mix changes between 1860 and 1930. We find that capital began as a q-complement for skilled and unskilled workers, and then dramatically increased its relative complementary with skilled workers around 1890. Simulations of a parametric production function calibrated to our estimates imply the level of capital-skill complementarity after 1890 likely allowed the U.S. economy to absorb the large wave of less-skilled immigration with a modest decline in less-skilled relative wages. This would not have been possible under the older production technology.

download in pdf format
   (433 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21435

Published: Jeanne Lafortune & Ethan Lewis & José Tessada, 2019. "People and Machines: A Look at the Evolving Relationship between Capital and Skill in Manufacturing, 1860–1930, Using Immigration Shocks," The Review of Economics and Statistics, vol 101(1), pages 30-43. citation courtesy of

Users who downloaded this paper also downloaded* these:
Card, Kluve, and Weber w21431 What Works? A Meta Analysis of Recent Active Labor Market Program Evaluations
Dinkelman w21440 Long Run Health Repercussions of Drought Shocks: Evidence from South African Homelands
Beattie, Laliberté, and Oreopoulos w22629 Thrivers and Divers: Using Non-Academic Measures to Predict College Success and Failure
Lau and Rosen w21432 Are Universities Becoming More Unequal?
Leeper, Traum, and Walker w21433 Clearing Up the Fiscal Multiplier Morass: Prior and Posterior Analysis
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us