TY  - RPRT
        AU  - Lafortune, Jeanne
AU  - Tessada, José
AU  - Lewis, Ethan Gatewood
        TI  - People and Machines: A Look at the Evolving Relationship Between Capital and Skill in Manufacturing 1860-1930 Using Immigration Shocks
        PY  - 2015/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 9217
        UR  - https://www.iza.org/index.php/publications/dp9217
        AB  - 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.
        KW  - manufacturing
KW  - skill-biased technical change
KW  - capital-skill complementarity
KW  - immigration
KW  - Second Industrial Revolution
        ER  -