I examine the long-run impacts of low-skill biased technologies on incumbent workers and their children. The McKay Stitcher dramatically changed shoe production in the late 19th century by replacing skilled workers with machines and less-skilled workers, but it was licensed in a few counties and impacted workers unevenly through the transportation network. Incumbent shoemakers left traditional shoemaking for lower wages and did not migrate. The transfer of occupation from father to son was disrupted, and the children of shoemakers entered lower income occupations and had lower wealth as a result. Using a model of occupation selection, I document enduring long-run impacts on shoemakers and their children, despite the economy otherwise exhibiting substantial geographic mobility and occupational mobility that might have suggested long-run mitigation of those consequences.
Greater exposure leads to:
Children of shoemakers:
On October 14, 1868, the Chicago Board of Trade began hosting and regulating a futures market for a variety of commodities. The previously unannounced introduction of the market suggests that a regression discontinuity design can help us understand how the introduction of a formalized futures exchange can affect the spot market. Through a model with risk averse farmers, we demonstrate how the introduction of futures can lead to lower spot prices and greater spot price volatility. Regression discontinuity estimates support this hypothesis.
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 use a measure of exposure to automobiles to examine the long-run consequences for incumbent horse-related workers and characterize the workers who adjusted best and who bore the largest burden.