Discussion paper

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

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.

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Citation

Enflo, K, J Molinder and T Karlsson (2019), ‘DP13986 More Power to the People: Electricity Adoption, Technological Change and Social Conflict‘, CEPR Discussion Paper No. 13986. CEPR Press, Paris & London. https://cepr.org/publications/dp13986