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Real wages, working time, and the Great Depression

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  • Hart, Robert A
  • Roberts, J Elizabeth

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 are strongly procyclical. Real hourly earnings of pieceworkers are also significantly procyclical. Otherwise, real wage measures that do not fully reflect hours changes produce either weak procyclical or acyclical wage responses.

Suggested Citation

  • Hart, Robert A & Roberts, J Elizabeth, 2010. "Real wages, working time, and the Great Depression," Stirling Economics Discussion Papers 2010-09, University of Stirling, Division of Economics.
    • Handle: RePEc:stl:stledp:2010-09
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    File URL: http://hdl.handle.net/1893/2506
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    References listed on IDEAS

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    1. Ronald G. Bodkin, 1969. "Real Wages and Cyclical Variations in Employment: A Re-Examination of the Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 2(3), pages 353-374, August.
    2. Gary Solon & Robert Barsky & Jonathan A. Parker, 1994. "Measuring the Cyclicality of Real Wages: How Important is Composition Bias?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(1), pages 1-25.
    3. Ben S. Bernanke & James Powell, 1986. "The Cyclical Behavior of Industrial Labor Markets: A Comparison of the Prewar and Postwar Eras," NBER Chapters, in: The American Business Cycle: Continuity and Change, pages 583-638, National Bureau of Economic Research, Inc.
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    Keywords

    Real wage cyclicality; working time; piecework; timework; the Great De pression;
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