WP Global Economy 2020.01.28
This paper investigates how mechanization, white-collar human capital, and the complementarity between them led to an improvement in the labor productivity of bluecollar workers. We estimated production functions that included interaction terms between variables representing the intensity of physical capital and white-collar human capital, using detailed mine-level panel data from the coal mining industry in prewar Japan. We found that mechanization and white-collar human capital were indeed complementary. That is, in the mines where mechanization proceeded, and only in those mines, the higher the education level of white-collar workers was, the larger was the impact on the labor productivity of blue-collar workers.