Technical Change and the Demand for Skills during the Second Industrial Revolution: Evidence from the Merchant Marine, 1891-1912*

Using a large, individual-level wage data set, we examine the impact of a major technological innovation—the steam engine—on the demand for skills in the merchant shipping industry. We find that the technical change created a new demand for engineers, a skilled occupation. It had a deskilling effect on production work— moderately skilled able-bodied seamen were replaced by unskilled engine room operatives. On the other hand, able-bodied seamen, carpenters and mates employed on steam vessels earned a premium relative to their counterparts on sail vessels, and this appears partly related to skill. (JEL J23, J31, N31, O30) _____________ * We thank Daron Acemoglu, Josh Angrist, David Autor, Eli Berman, Jonathan Guryan, Peter Meyer, Peter Mieszkowski, and seminar participants at Rice/UH, Cornell, 2004 SOLE meetings, IZA and 2004 NBER Summer Institute Labor Studies Workshop for helpful comments and discussion.