Pieter (Jop) WOLTJER

A New View on Technology and Productivity in German Manufacturing in the Early Twentieth Century

ABSTRACT: Labor productivity in German manufacturing lagged persistently behind the United States in the early twentieth century. Traditionally, this is attributed to dichotomous technology paths across the Atlantic. However, various industry case studies suggest rapid diffusion of U.S. technologies in Germany. We develop a novel decomposition framework based on Data Envelopment Analysis (DEA) to reconcile these findings. We conclude that by 1936 inefficient assimilation of modern production techniques – and not the use of different techniques – accounted for most of the U.S./German labor-productivity gap. Our findings call for a reappraisal of the drivers behind cross-country differences in manufacturing performance.

AUTHORS: Marcel Timmer, Joost Veenstra and Pieter Woltjer

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Decomposition of the Labor-Productivity Gap

Distribution of Manufacturing Employment over Machine-Intensity Levels: Germany and U.S. 1909

Distribution of Manufacturing Employment over Machine-Intensity Levels: Germany and U.S. 1936/1935

Dichotomous Technology Paths: cotton and rayon manufacturing

Inefficient Assimilation: industrial chemicals manufacturing

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