Paper Example on Productivity and Growth 1820-1860

Introduction

The industrialization growth in the United States has been found to been found to improve significantly. With the best reallocation of resources accompanied by processes that yield the significant gain to the industries, there has been high productivity in the sectors. The productivity growth in the industrial area has led to the improvement of the phases of industrialization hence resolving issues on the sources, location, timing as well as economic growth. Through the progress in the manufacturing, there has been rapid industrial growth driven by the dynamic manufacturing industries.

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During the four years 1995-99 U. S. productivity growth experienced a strong revival and achieved growth rates exceeding that of the golden age' of 1913-72. Accordingly many observers have declared the New Economy' (the Internet and the accompanying acceleration of technical change in computers and telecommunications) to be an Industrial Revolution equal in importance, or even more important, than the Second Industrial Revolution of 1860-1900 which gave us electricity, motor and air transport, motion pictures, radio, indoor plumbing, and made the golden age of productivity growth possible. This paper raises doubts about the validity of this comparison with the Great Inventions of the past. It dissects the recent productivity revival and separates the revival of 1.35 percentage points (comparing 1995-99 with 1972-95) into 0.54 of an unsustainable cyclical effect and 0.81 points of acceleration in trend growth. The entire trend acceleration is attributed to faster multi-factor productivity (MFP) growth in the durable manufacturing sector, consisting of computers, peripherals, telecommunications, and other types of durables. There is no revival of productivity growth in the 88 percent of the private economy lying outside of durables; in fact when the contribution of massive investment in computers in the nondurable economy is subtracted, MFP growth outside of durables has actually decelerated. The paper combines the Great Inventions of 1860-1900 into five clusters' and shows how their development and diffusion in the first half of the 20th century created a fundamental transformation in the American standard of living from the bad old days of the late 19th century. In comparison, computers and the Internet fall short. The rapid decline in the cost of computer power means that the marginal utility of computer characteristics like speed and memory has fallen rapidly as well, implying that the greatest contributions of computers lie in the past, not in the future. The Internet fails the hurdle test as a Great Invention on several counts. First, the invention of the Internet has not boosted the growth in the demand for computers; all of that growth can be interpreted simply as the same unit-elastic response to the decline in computer prices as was prevalent prior to 1995. Second, the Internet provides information and entertainment more cheaply and conveniently than before, but much of its use involves substitution of existing activities from one medium to another. As a result, there is a generation of sustainable products that compete with other producers.

With the industry estimates, the degree of productivity growth is determined hence deepening the capital innovations. The change in the organization ranging from labor to the intensity of work leads to relative accessibility thus high productivity growth. Therefore, employing the best resources in manufacturing is critical for the productivity growth for industrial development.

The productivity growth in the manufacturing firm data for 1820 to 1860 is essential for determining the role of women as well as children in the field of industry in the American Northeast. Manufacturing firm data for 1820 to 1850 are employed to investigate the role of women and children in the industrialization of the American Northeast. The principal findings include: (1) Women and children composed a major share of the entire manufacturing labor force; (2) their employment was closely associated with production processes used by large establishments, both mechanized and non-mechanized; (3) the wage of females (and boys) increased relative to that of men with industrial development; and (4) female labor force participation in industrial counties was substantial. These findings bear on the nature of technical change during early industrialization and why American industrial development was initially concentrated in the Northeast.

Sokoloff (1982), women and children play a significant role in the manufacturing labor force of the industry. The employed as associated with the production process that establishes and increases industrial development. The women labor force in the industrial work has an impact on the technical change on the early industrialization which is a reason for industrial development in the Northeast.

Conclusion

This paper reports estimates of labor and total factor productivity, for thirteen manufacturing industries in the Northeast over the period from 1820 to 1860. It finds that although the highly mechanized and capital-intensive industries, such as cotton and wool textiles, realized somewhat more rapid progress than the others did, even the latter managed major advances. The evidence appears to support the conclusion that the manufacturing sector in the Northeast was quite dynamic during this stage of industrialization, and that much of its early productivity growth can be explained by changes in production processes that did not require mechanization or substantial increases in capital intensity. This suggests, as has been argued by a number of recent studies building on an old tradition, that developments such as increases in the division and intensity of labor within firms and other relatively subtle alterations in technique, perhaps stimulated by the expansion of markets, may have played important roles in accounting for the progress achieved. Therefore, productivity and growth require a substantial increase in capital intensity with the developed alterations techniques in the firm.

This paper studies how well labor markets operated, and industrial workers fared, during early American industrialization. The principal bodies of evidence examined are four cross-sections of manufacturing firm data from 1820 to 1860, and newly-constructed price indexes for classes of products in different locales. The central findings are that real wages rose substantially over time for all segments of the manufacturing labor force. Workers responded flexibly to changing circumstances, and benefited almost immediately from the rapid expansion of the 1820s. Impressive growth in compensation was maintained until the late 1840s or early 1850s, when progress was slowed by heavy immigration and the mechanization of a number of previously labor intensive industries. Of course, these gains were not continuous, but the evidence bears against the view that the difficult years were due to poorly-functioning markets, rapid changes in technology, or other aspects of industrialization. On the contrary, the chief deviations from the upward trend in real wages seem to be attributable to supply-side shocks originating in the agricultural sector or in unusually large immigration flows, rather than to the path of industrial development. Therefore, the real wage rise for the manufacturing labor force changes the circumstances in ind...