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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.
- Format:
- Book
- Author/Creator:
- Lafortune, Jeanne.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w21435.
- NBER working paper series no. w21435
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- People and Machines
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2015.
- Summary:
- 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.
- Notes:
- Print version record
- July 2015.
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