Real Wages, Working Time and the Great Depression

49 Pages Posted: 7 Feb 2011

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

Date Written: February 4, 2011

Abstract

We have assembled two British data sets to re-examine the behaviour of real wages over the 1927-1937 cycle that contained the Great Depression. Both provide a degree of micro detail that greatly exceeds previous studies. The first consists of annual wages for 36 manufacturing industries. The second is based on blue-collar workers’ company payroll data within engineering and metal working firms. It allows us to distinguish between pieceworkers and timeworkers, 14 occupations and 51 travel-to-work geographical districts. We measure the cycle using national unemployment rates as well as rates that match our industrial and district breakdowns. The roles of standard and overtime hours are found to be crucial to the behaviour of real pay during the Depression. Real weekly earnings of both timeworkers and pieceworkers are strongly procyclical. Real hourly earnings of pieceworkers, who comprise over half of the engineering workforce, are also significantly procyclical. Timeworkers’ hourly wages are relatively unresponsive to the cycle. Annual wage measures are, at best, very weakly procyclical.

Keywords: real wage cyclicality, working time, piecework, timework, 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 (February 4, 2011). Available at SSRN: https://ssrn.com/abstract=1755019 or http://dx.doi.org/10.2139/ssrn.1755019

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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