Technical Change and the Wage Structure during the Second Industrial Revolution: Evidence from the Merchant Marine

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 08.06.2004, 12:15 - 13:30


Presentation by 

Chinhui Juhn (University of Houston)


Using a large, individual-level wage data set, we examine the impact of a major technological innovation—the development of powerful and economical steam engines—on skill demand and the wage structure among the merchant marine during the turn of the century, 1892-1912. The new technology created demand for highly skilled workers, the engineers, in charge of maintaining the engines. On the other hand, technological innovation may have been deskilling for production work since experienced able-bodied seamen were replaced by laborers in the engine room. We find a substantial wage premium on steam vessels, even controlling for rank and occupation. The steam premium reflected a compensating differential in some occupations but it may have also reflected the sorting of better workers to steam. We also document the wage structure over a longer time period, 1865-1905, using wage observations in sailing vessels. Similar to previous studies which have examined other industries, we find that the skill premium (measured as the ratio of wages at the 90th and the 10th percentiles) did not change dramatically over this period. We do find, however, that wages fell in occupations, such as sail makers and able-bodied seamen, which utilized skills that were not readily portable across technologies.

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