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Jeff Chan
''The long-run impact of the power loom: evidence from 19th century Prussia''
( 2014, Vol. 34 No.3 )
Using county-level census data from 19th century Prussia, this paper argues that the introduction of the power loom, a key technological innovation in the Industrial Revolution, had a significant impact on labour market outcomes and composition 40 years later. To combat endogeneity, I use a county's proximity to London as an instrument for the adoption of power looms. The empirical evidence suggests that the spread of the Industrial Revolution increased wages of urban and rural workers of both genders. I also show that the introduction of the power loom significantly reduced the size of the agricultural sector in the long-run.
Keywords: industrialization, knowledge diffusion
JEL: N1 - Economic History: Macroeconomics and Monetary Economics; Growth and Fluctuations: General, International, or Comparative
Manuscript Received : May 11 2014 Manuscript Accepted : Aug 07 2014

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