Working Paper: CEPR ID: DP13986
Authors: Kerstin Enflo; Jakob Molinder; Tobias Karlsson
Abstract: There is a wide-spread concern that technical change may spur social conflicts, especially if workersare replaced with machines. To empirically analyze whether job destruction drives protests, we study ahistorical example of a revolutionary new technology: the adoption of electricity. Focusing on the gradualroll-out of the Swedish electricity grid between 1900 and 1920 enables us to analyze 2,487 Swedish parishesin a difference-in-differences framework. Proximity to large-scale water-powered electricity plants is usedto instrument for electricity adoption. Our results confirm that the labor saving nature of electricity wasfollowed by an increase of local conflicts in the form of strikes. But displaced workers were not likelyto initiate conflicts. Instead, strikes were most common in sectors with employment growth. Similarly,we find that the strikes were of an offensive rather than a defensive nature. Thus, electrification did notresult in rebellions driven by technological anxiety. It rather provided workers with a stronger bargainingposition from which they could voice their claims through strikes.
Keywords: technological change; electrification; labor demand; labor conflicts; strikes; infrastructure investments
JEL Codes: N14; N34; N74; O14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Electricity adoption (L94) | Local conflicts (strikes) (J52) |
| Electricity adoption (L94) | Bargaining power of workers (J52) |
| Local conflicts (strikes) (J52) | Higher wages (J39) |
| Electricity adoption (L94) | Demand for labor (J23) |
| Electricity adoption (L94) | Employment patterns favoring medium-skilled workers (J29) |
| Electricity adoption (L94) | Decline in low-skilled agricultural labor (J43) |