The Division of Labour, Coordination, and the Demand for Information Processing

Guy Michaels

No 6358, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Since Adam Smith's time, the division of labour in production has increased significantly, while information processing has become an important part of work. This paper examines whether the need to coordinate an increasingly complex division of labour has raised the demand for clerical office workers, who process information that is used to coordinate production. In order to examine this question empirically, I introduce a measure of the complexity of an industry's division of labour that uses the Herfindahl index of occupations it employs, excluding clerks and managers. Using US data I find that throughout the 20th century more complex industries employed relatively more clerks, and recent Mexican data shows a similar relationship. The relative complexity of industries is persistent over time and correlated across these two countries. I further document the relationship between complexity and the employment of clerks using an early information technology (IT) revolution that took place around 1900, when telephones, typewriters, and improved filing techniques were introduced. This IT revolution raised the demand for clerks in all manufacturing industries, but significantly more so in industries with a more complex division of labour. Interestingly, recent reductions in the price of IT have enabled firms to substitute computers for clerks, and I find that more complex industries have substituted clerks more rapidly.

Keywords: Division of labour; Information processing; Organization of production.; Technological change (search for similar items in EconPapers)
JEL-codes: D73 J44 M54 O33 (search for similar items in EconPapers)
Date: 2007-06
New Economics Papers: this item is included in nep-his, nep-ino and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The Division of Labor, Coordination, and the Demand for Information Processing (2007)
Working Paper: The division of labor, coordination, and the demand for information processing (2007)
Working Paper: The division of labor, coordination, and the demand for information processing (2007)
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