DP13986 More Power to the People: Electricity Adoption, Technological Change and Social Conflict

Author(s): Kerstin Enflo, Tobias Karlsson, Jakob Molinder
Publication Date: September 2019
Date Revised: September 2019
Keyword(s): electrification, infrastructure investments, Labor conflicts, labor demand, strikes, Technological change
JEL(s): N14, N34, N74, O14
Programme Areas: Economic History
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13986

There is a wide-spread concern that technical change may spur social conflicts, especially if workers are replaced with machines. To empirically analyze whether job destruction drives protests, we study a historical example of a revolutionary new technology: the adoption of electricity. Focusing on the gradual roll-out of the Swedish electricity grid between 1900 and 1920 enables us to analyze 2,487 Swedish parishes in a difference-in-differences framework. Proximity to large-scale water-powered electricity plants is used to instrument for electricity adoption. Our results confirm that the labor saving nature of electricity was followed by an increase of local conflicts in the form of strikes. But displaced workers were not likely to initiate conflicts. Instead, strikes were most common in sectors with employment growth. Similarly, we find that the strikes were of an offensive rather than a defensive nature. Thus, electrification did not result in rebellions driven by technological anxiety. It rather provided workers with a stronger bargaining position from which they could voice their claims through strikes.