The economic aftermath of the 1960s riots: evidence from property values

Type Working Paper
Title The economic aftermath of the 1960s riots: evidence from property values
Publication (Day/Month/Year) 2004
Since Adam Smith’s time, the division of labor 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 labor 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 labor 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 labor. Interestingly, recent
reductions in the price of IT have enabled firms to substitute

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