I examine the long-run generational impacts on workers from technological displacement. 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 in counties unevenly through the transportation network. The return to traditional shoemaking dropped substantially, in a model of occupation selection, with higher losses in future earnings in counties with higher ex ante import exposure to the counties that received licenses. For the first generation, incumbent shoemakers left traditional shoemaking and many took on new shoe factory positions for lower wages. There was no substantial adjustment through migration, however, despite opportunities for geographic mobility. For the second generation, after technological displacement, the children of more-exposed shoemakers did not pursue traditional shoemaking but were more likely to end up in shoe factory work. The children of shoemakers continued in lower income occupations and had lower wealth, relative to the children of craftsmen in similar ex ante labor market positions. There were enduring long-run impacts on shoemakers and their children, despite substantial geographic mobility and occupational mobility that might otherwise suggest long-run mitigation of technological displacement.
Greater exposure leads to:
Children of shoemakers: