In the early 1900s, telephone operation was among the most common jobs for American women, and telephone operators were ubiquitous…By 1920, AT&T was the largest U.S. employer, accounting for over 1% of the non-farm U.S. workforce, and by far the largest employer of women…1920^–₂₀1940_84ya, AT&T undertook one of the largest automation investments in modern history, replacing operators with mechanical switching technology in over half of the U.S. telephone network.

Using variation across U.S. cities in the timing of adoption, we study how this wave of automation affected the labor market for young women.

Although automation eliminated most of these jobs, it did not reduce future cohorts’ overall employment: the decline in operators was counteracted by employment growth in middle-skill clerical jobs and lower-skill service jobs, including new categories of work.

Using a new genealogy-based census-linking method, we show that incumbent telephone operators were most affected, and a decade later more likely to be in lower-paying occupations or no longer working.

…In this article, we study the effects of one of the largest automation shocks in history: the automation of telephone operation. In 1920, telephone operator was one of the most common jobs for American women, and operators were a staple of everyday life across the country. 1920^–₂₀1940_84ya, telephone exchanges serving over half of the United States were mechanized, replacing most local operators, one city at a time. The fraction of female employment exposed to this shock is similar to the fraction of the current U.S. workforce employed as cashiers or customer service workers—jobs that are increasingly being automated today (U.S. Bureau of Labor Statistics2022b).

We document the effects of mechanizing telephone operation on incumbent workers and future generations. To do so, we construct a data set measuring the local adoption of mechanical call switching and combine it with census data on the complete U.S. population and a longitudinally linked sample of women. Our exercise comprises two distinct but closely related analyses, on two samples, answering two questions: (1) how did automating telephone service affect incumbent telephone operators, and (2) how did it affect future generations of young women entering the labor market? As a first step, we show that after a city was cut over to mechanical operation, the number of 16–25-year-old women in subsequent cohorts employed as telephone operators immediately fell by 50–80%. These jobs made up around 2% of employment for this group, and even more for those under age 20—and given turnover rates, this shock may have foreclosed entry-level job opportunities for as much as 10–15% of peak cohorts.

The effect of this shock on incumbent operators was to dispossess many of their jobs and careers: telephone operators in cities with cutovers were less likely to be in the same job the next decade we observe them, less likely to be working at all, and conditional on working were more likely to be in lower-paying occupations. In contrast, however, automation did not reduce employment rates in subsequent cohorts of young women, who found work in other sectors—including jobs with similar demographics and wages (such as typists and secretaries), and some with lower wages (such as food service workers). This job growth is not attributable to mechanical switching’s effects on productivity (which were low) or q-complementarity (which was specific to the telephone sector). Though wage data for this era are more limited, using available data we also do not find evidence that local labor markets re-equilibrated at substantially lower wages.

The stability of both employment rates and wages is consistent with demand growing for these categories of workers in other sectors of the economy—and, in turn, with the predictions of Acemoglu & Restrepo2018, who suggest that firms will endogenously develop new uses for labor when automation makes it abundant. Buttressing this interpretation, our evidence indicates some occupations expanded to new sectors of local economies after cutovers—that is, the emergence of new work (Autor et al 2024). Taken together, these results suggest that although existing workers may be exposed to job loss, local economies can adjust to large automation shocks over medium horizons.

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