The Evolution of Work


Mobius M, Schoenle R. The Evolution of Work. 2014.


The division of labor first increased during industrialization, and then decreased again after 1970 as job roles have expanded. In this paper, we explain these trends in the organization of work through a simple model, making two minimal assumptions: (a) machines require standardization to exploit economies of scale and (b) more customized products are subject to trends and fashions which make production tasks less predictable and a strict division of labor impractical. The model predicts capital-skill substitutability during industrialization and capital-skill complementarity in the maturing industrial economy: At the onset of industrialization, the market supports only a small number of generic varieties which can be mass-produced under a strict division of labor. Then, thanks to productivity growth, niche markets gradually expand, producers eventually move into customized production, and the division of labor decreases again. We test our model by exploiting the time-lags in the introduction of bar-coding in three-digit SIC manufacturing industries in the U.S.. We find that both increases in investments in computers and bar-coding have led to skill-upgrading. However, consistent with our model bar-coding has affected mainly the center of the skill distribution by shifting demand away from the high-school educated to the less-than-college educated.

See also: Working Papers
Last updated on 04/29/2018