ABSTRACT:
The spatial concentration of productivity and employment is central to economic geography. Yet, how the location of frontier technology affects the location of jobs is not well studied. In this paper, we examine how the Space Race driven expansion of the high-tech sector affected labor demand in the manufacturing sector. We first use Compustat data from 1954 to 1997 to show that firms receiving Space Race contracts expanded employment, reduced labor intensity, and with little change in total factor productivity. Our analysis of MSA-level Manufacturing census data from 1947 to 1997 reveals two further results on the indirect effects of the Space Race. We find that the Space Race reduced employment and wages in firms that do not receive NASA contracts, but are colocated with those that do. We find little positive effect of the Space Race on total factor productivity of colocated firms, but a decline in labor intensity.
Read the paper: Space Race Technology and the Impact on Jobs in U.S. Cities
