I investigate how the relationship between the wage and the length of the work day has changed since the 1890s among prime-aged men and women. I find that across wage deciles deciles, and within industry and occupation groups the most highly paid worked fewer hours than the lowest paid in the 1890s, but that by 1973 differences in hours worked were small and by 1991 the highest paid worked the longest day. Changing labor supply elasticities explain the compression in the distribution of the length of the work day. In the 1890s the labor supply curve was strongly backwards bending, perhaps because men preferred to smooth hours over their work lives rather than bunch them as they do today. In fact, the intertemporal elasticity of substitution was slightly negative in the 1890s, but by 1973 was positive. I show that the unequal distribution of work hours in the past equalized income, but that between 1973 and 1991 it magnified weekly earnings inequality, accounting for 26 percent of earnings inequality between the top and bottom declines among men, more than all of the earnings inequality among women, and 17 percent of the increase in total household earnings inequality among husband and wife households.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
6504.
Length: Date of creation: Apr 1998 Date of revision: Handle: RePEc:nbr:nberwo:6504
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Find related papers by JEL classification: J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply N30 - Economic History - - Labor and Consumers, Demography, Education, Income, and Wealth - - - General, International, or Comparative
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