I examine the long-run impacts of a deskilling technology on workers and their children. The McKay stitcher dramatically changed shoe production in the late 19th century by replacing skilled artisans with machines and less-skilled workers. It was licensed in only a few counties and impacted workers across counties unevenly through the transportation network. More-exposed shoemakers left traditional shoemaking for lower wage occupations and did not migrate. The transfer of occupation from father to son was disrupted, and the children of shoemakers entered lower income occupations. New entrants to shoe factories came from poorer and less literatefamilies. Using a model of occupation selection, I infer the change in life-time earnings implied by the impact of the technology on occupation exit. I find that the most exposed shoemakers and their children lost 2.2 and 1.9 years of wages, respectively.
Greater exposure leads to:
Children of shoemakers:
New Entrants:
When communication is slow in financial markets, traders may be unable to take advantage of (potential) arbitrage opportunities. This can lead to excess price dispersion both within commodities and across linked markets. We demonstrate the importance of communication speed by studying the installation of telephones around the Chicago Board of Trade in 1878. Consistent with theoretical predictions, we find a decline in price dispersion across a variety of markets.
The proliferation of automobiles in the early 20th century led to the rapid decline of occupations related to horse-driven transportation, including teamsters and drivers of wagons and buggies. Using newly digitized data on state highways in this period and data on motor vehicle registrations, we create a measure of exposure to automobiles to examine the long-run consequences for incumbent horse-related workers. We characterize the workers who adjusted best and who bore the largest burden.