Using a large, individual-level wage data set, we examine the impact of a major technological innovation the steam engine on skill demand and the wage structure in the merchant shipping industry. We find that the technical change created a new demand for skilled workers, the engineers, while destroying demand for workers with skills relevant only to sail. It had a deskilling effect on production work able-bodied seamen (essentially, artisans) were replaced by unskilled engine room operatives. On the other hand, mates and able-bodied seamen employed on steam earned a premium relative to their counterparts on sail. A wholesale switch from sail to steam would increase the 90/10 wage ratio by 40%, with most of the rise in inequality coming from the creation of the engineer occupation.
Published: Chin, Aimee, Chinhui Juhn and Peter Thompson. "Technical Change And The Demand For Skills During The Second Industrial Revolution: Evidence From The Merchant Marine, 1891-1912," Review of Economics and Statistics, 2006, v88(3,Aug), 572-578.
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