Real Wages, Working Time, and the Great Depression: What Does Micro Evidence Tell Us?

46 Pages Posted: 29 Jun 2010

See all articles by Robert A. Hart

Robert A. Hart

University of Stirling - Department of Economics; Institute for the Study of Labor (IZA)

Elizabeth Roberts

University of Stirling - Department of Economics

Abstract

Based largely on industry-level aggregate statistics, the prevailing view, and one that has strongly influenced macroeconomic thought, is that real wages during the cycle containing the Great Depression are either acyclical or countercyclical. Does this finding hold-up when more micro data are employed? We examine this question based on detailed blue-collar workers' company payroll data for a large section of the British engineering and metal working industries. We distinguish between pieceworkers and timeworkers, with pieceworkers accounting for over half the workforce. For the period 1927 to 1937, the two pay groups are broken down into 14 occupations, and 48 travel-to-work geographical districts. We estimate wage and hours cyclicality in respect of the national unemployment rate as well as the district rates. Weekly hours and real weekly earnings are found to be strongly procyclical. Real hourly earnings of pieceworkers are also significantly procyclical. The roles of standard and overtime hours are crucial to these findings.

Keywords: timework, piecework, working time, real wage cyclicality, the Great Depression

JEL Classification: E32, J31, J33, N64

Suggested Citation

Hart, Robert A. and Roberts, Elizabeth, Real Wages, Working Time, and the Great Depression: What Does Micro Evidence Tell Us?. IZA Discussion Paper No. 4977, Available at SSRN: https://ssrn.com/abstract=1631112

Robert A. Hart (Contact Author)

University of Stirling - Department of Economics ( email )

Stirling, Scotland FK9 4LA
United Kingdom
+44 1786 467 471 (Phone)
+44 1786 467 469 (Fax)

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Elizabeth Roberts

University of Stirling - Department of Economics ( email )

Stirling FK9 4LA, Scotland FK9 4LA
United Kingdom

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