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Real wage cyclicality and the Great Depression: evidence from British engineering and metal working firms

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  • Robert A. Hart
  • J. Elizabeth Roberts

Abstract

Based on occupation-level payrolls from around 2000 member firms of the British Engineering Employers' Federation we examine the behaviour of real hourly earnings over the 1927--1937 Great Depression cycle. Pay and working time data cover adult male blue-collar workers within engineering and metal working firms. We attempt to tackle the problem of countercyclical aggregation bias linked to workforce composition by distinguishing between pieceworkers and timeworkers who are broken down into 14 occupations and 51 travel-to-work engineering districts. We test for the likely effects on our estimates of within-occupation heterogeneity. For pieceworkers we find significant, though modest, real hourly wage procyclicality. Timeworkers' real hourly wages are found to be acyclical. Due to procyclical fluctuations in weekly hours, the real weekly pay of both pieceworkers and timeworkers are strongly procyclical. We compare hourly and weekly pay outcomes with findings based on more recent micro data. Copyright 2013 Oxford University Press 2012 All rights reserved, Oxford University Press.

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  • Robert A. Hart & J. Elizabeth Roberts, 2013. "Real wage cyclicality and the Great Depression: evidence from British engineering and metal working firms," Oxford Economic Papers, Oxford University Press, vol. 65(2), pages 197-218, April.
    • Handle: RePEc:oup:oxecpp:v:65:y:2013:i:2:p:197-218
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    Cited by:

    1. Hart, Robert A. & Roberts, J. Elizabeth, 2013. "Industrial Composition, Methods of Compensation and Real Earnings in the Great Depression," National Institute Economic Review, National Institute of Economic and Social Research, vol. 226, pages 17-29, November.
    2. Hart, Robert A & Roberts, J Elizabeth, 2013. "The rise and fall of piecework-timework wage differentials: market volatility, labor heterogeneity, and output pricing," Stirling Economics Discussion Papers 2013-12, University of Stirling, Division of Economics.
    3. Hart, Robert A., 2019. "Labor Productivity during the Great Depression in UK Manufacturing," IZA Discussion Papers 12379, Institute of Labor Economics (IZA).

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