Changing Returns to Scale in Manufacturing 1880-1930: The Rise of (Skilled) Labor? / Jeanne Lafortune, Ethan G. Lewis, José Pablo Martínez, José Tessada.

Format:

Book

Author/Creator:

Lafortune, Jeanne.

Contributor:

National Bureau of Economic Research.

Lewis, Ethan G.

Martínez, José Pablo.

Tessada, José.

Series:

Working Paper Series (National Bureau of Economic Research) no. w28633.

NBER working paper series no. w28633

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

This paper estimates returns to scale for manufacturing industries around the turn of the twentieth century in the United States by exploiting an industry-city panel data for the years 1880-1930. We estimate decreasing returns to scale on average over the period, contrary to most of the existing literature, because our empirical methodology allows us to separate returns to scale from "agglomeration" effects. We also find that returns to scale grew substantially after 1910, mostly because the return to labor grew. We find that this was more marked in industries that were more intensive in human capital and energy at the beginning of the period and in cells that were less competitive. Overall, results suggest that technological change and lack of initial competition played relevant roles in the rise of larger establishments in manufacturing.

Notes:

Print version record

April 2021.