Steam Power, Establishment Size, and Labor Productivity Growth in Nineteenth Century American Manufacturing

Jeremy Atack, Fred Bateman and Robert Margo

No 11931, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use establishment level data from the 1850-80 censuses of manufacturing to study the correlates of the use of steam power and the impact of steam power on labor productivity growth in nineteenth century American manufacturing. A key result is that establishment size mattered: large establishments, as measured by employment, were much more likely to use steam power than smaller establishments. Controlling for firm size, location, industry, and other establishment characteristics, steam powered establishments had higher labor productivity than establishments using hand or animal power, or water power. We also find that the impact of steam on labor productivity was increasing in establishment size. The diffusion of steam power was an important factor behind the growth of labor productivity, accounting for 22 to 41 percent of that growth between 1850 and 1880, depending on establishment size.

JEL-codes: N61 (search for similar items in EconPapers)
Date: 2006-01
New Economics Papers: this item is included in nep-his and nep-ino
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Published as Atack, Jeremy, Fred Bateman, and Robert Margo. “Steam Power, Establishment Size, and Labor Productivity Growth in Nineteenth Century American Manufacturing.” Explorations in Economic History 45, 2 (April 2008): 185-98.

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