Missed opportunities? Germany and the transatlantic labor-productivity gap, 1900-1940

In the early twentieth century new technologies that were introduced during the second industrial revolution created opportunities for labor-productivity growth. At the same time, a labor-productivity gap emerged between Europe and the US in manufacturing with the former lagging increasingly far behind the latter. Did European countries fail to catch the winds of change and, therefore, miss out on opportunities for growth?

In this dissertation I study this question for Germany and move away from explanatory frameworks customary applied to the German/US labor-productivity gap. While the performance gap is traditionally associated with a failure on the part of Europe to operate at US levels of capital intensity, I show that during the interwar period Germany rapidly acquired American-type technology. The bulk of the performance gap resulted from an inefficient use of this newly obtained technology in Germany, rather than from relatively low capital-intensity levels.