Working papers

  • The labor market consequences of electricity adoption: concrete evidence from the Great Depression  November 2014.

    The 1920s and 1930s witnessed changes in the US labor market, with a shift away from dexterity-intensive occupations, a productivity speedup, and low job creation. This paper asks whether the adoption of electricity can explain these changes. The identification strategy uses a state's initial loading on the technology to generate electricity—hydroelectric power or coal power—as an instrument for changes in the price of electricity. It also uses a newly digitized dataset for the concrete industry from 1929 to 1935 to provide plant-level measures of labor market outcomes. Technical progress in electric utilities caused, in the downstream industry of concrete, a decrease in employment and in the labor share of income, as well as an increase in labor quantity productivity and electrical intensity. Download
  • Computer Adoption and the Changing Labor Market   May 2014.

    The US labor market has changed in recent decades, both in the medium-term and in the short-term. This paper examines computers as a theoretical explanation for these changes. When computers become cheap and competitive compared to workers, they diffuse more rapidly and become more important in the conventional mechanism of capital-labor substitution. The model can account for recent structural changes with this trend of automation: employment has shifted away from routine occupations and the labor share of income has declined. The model also predicts that recessions accelerate the decline in routine occupations—firms prefer to destroy routine jobs during a downturn, when the opportunity cost of restructuring is low. This acceleration can account for recent cyclical changes of the labor market: routine job losses are concentrated in recessions and the ensuing recoveries are jobless. Download
  • Routinization and Slow Recoveries in Consumption May 2014.

    Recent recoveries in the United States have been slow with an output increase of 9% for two years after the NBER trough of post-1990 recessions, as opposed to a 15% increase after pre-1990 recessions. This paper asks whether computer capital-routine labor substitution and hand-to-mouth behavior of routine workers can explain recent slow recoveries in consumption and output. Nonroutine workers are Ramsey optimizers who smooth consumption. Employment in nonroutine occupations grows at the same rate as employment in routine occupations before the 1980s and at a faster rate after the 1980s. Workers transitioning from routine to nonroutine occupations need to go through a period of retraining, during which they remain unemployed and are unable to consume. When workers in routine occupations are hand-to-mouth consumers, recoveries of consumption are fast before the 1980s and slow after the 1980s. Workers fired from routine jobs before the 1980s can easily find a new job, so their consumption “bounces back” and recovers back to peak levels. The fast recovery of consumption among routine occupations causes the growth rate of total consumption to be higher than the growth rate of consumption among nonroutine occupations. Workers fired from routine jobs after the 1980s have to go through a period of retraining, during which they consume their unemployment benefits. If these benefits are constant, consumption of workers in retraining is stagnant and the growth rate of total consumption is lower, leading to a slow recovery. Download

Miguel Morin

Ph.D. in Economics from Columbia University

Faculty of Economics
Austin Robinson Building, Sidgwick Avenue
Cambridge CB3 9DD
United Kingdom
Phone: +44 7795 140 682