Working Paper: NBER ID: w27436
Authors: Jeremy Atack; Robert A. Margo; Paul Rhode
Abstract: During the nineteenth century, the US manufacturing sector shifted away from the “hand labor” mode of production, characteristic of artisan shops, to the “machine labor” of the factory. This was the focus of an extremely detailed but extraordinarily complex study by the Commissioner of Labor published in 1899 that has until now defied systematic analysis. Here, we explore the overall productivity gains associated with these changes in production methods and the specific, causal role of inanimate power. Under the machine labor mode, the time necessary to complete production tasks declined by 85 percent, a remarkable gain in labor productivity. We also present OLS and IV estimates of the effects of using inanimate power, such as steam, at the production operation level Our IV is based on the gerunds describing the various production activities. Treating our IV estimates as causal, about one-third of the higher productivity of machine labor is attributed to greater use of inanimate power per se.
Keywords: mechanization; labor productivity; inanimate power; industrialization
JEL Codes: N61; O14; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Machine Labor (J39) | Production Time (C69) |
| Mechanization (L64) | Time Taken for Production Tasks (D20) |
| Mechanization (L64) | Higher Productivity of Machine Labor (D24) |
| Labor Productivity (O49) | Production Time (C69) |
| Mechanization (L64) | Labor Productivity (O49) |