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Did firms cut nominal wages in a deflationary environment?: Micro-level evidence from the late 19th and early 20th century banking industry

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  • Seltzer, Andrew

Abstract

This paper examines wage adjustment in the late 19th and early 20th centuries using personnel records from the Union Bank of Australia and Williams Deacon's Bank (England). During the period of this study there was steep and prolonged deflation. Firm-specific and industry-specific demand shocks also put downwards pressure on wages. Although it was common for individual wages at the banks to remain unchanged from year to year, wage cuts were very rare even for senior workers. Turnover at both banks was extremely low and, thus, despite flexibility in the wages of incoming workers, did not offset the effects of individual-level wage rigidity. Consequently real wages moved counter-cyclically.

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  • Seltzer, Andrew, 2010. "Did firms cut nominal wages in a deflationary environment?: Micro-level evidence from the late 19th and early 20th century banking industry," Explorations in Economic History, Elsevier, vol. 47(1), pages 112-125, January.
    • Handle: RePEc:eee:exehis:v:47:y:2010:i:1:p:112-125
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    Cited by:

    1. Charles Fahey & André Sammartino, 2013. "Work and Wages at a Melbourne Factory, the Guest Biscuit Works 1870–1921," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 53(1), pages 22-46, March.
    2. Patrick J. Coe, 2018. "Downward nominal wage rigidity: Evidence from Canada 1901–1950," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(3), pages 946-967, August.
    3. Andrew Seltzer, 2013. "The impact of female employment on male salaries and careers: evidence from the English banking industry, 1890–1941," Economic History Review, Economic History Society, vol. 66(4), pages 1039-1062, November.
    4. Seltzer, Andrew, 2012. "The Impact of Female Employment on Male Wages and Careers: Evidence from the English Banking Industry, 1890-1941," IZA Discussion Papers 6663, Institute of Labor Economics (IZA).

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