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The Wage and the Length of the Work Day: From the 1890s to 1991

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  • Dora L. Costa

Abstract

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.

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Date of creation: Apr 1998
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Publication status: published as Journal of Labor Economics, Vol. 18, no. 1 (January 2000): 156-181.
Handle: RePEc:nbr:nberwo:6504

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  1. Chinhui Juhn & Kevin M. Murphy, 1996. "Wage Inequality and Family Labor Supply," NBER Working Papers 5459, National Bureau of Economic Research, Inc.
  2. Shelly J. Lundberg, 1984. "Tied Wage-Hours Offers and the Endogeneity of Wages," NBER Working Papers 1431, National Bureau of Economic Research, Inc.
  3. Costa, Dora L, 1995. "Pensions and Retirement: Evidence from Union Army Veterans," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 297-319, May.
  4. Goldin, Claudia & Margo, Robert A, 1992. "The Great Compression: The Wage Structure in the United States at Mid-century," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 1-34, February.
  5. Atack, Jeremy & Bateman, Fred, 1992. "How Long Was the Workday in 1880?," The Journal of Economic History, Cambridge University Press, vol. 52(01), pages 129-160, March.
  6. Goldin, Claudia, 1988. "Maximum Hours Legislation and Female Employment: A Reassessment," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 189-205, February.
  7. Barzel, Yoram & McDonald, Richard J, 1973. "Assets, Subsistence, and The Supply Curve of Labor," American Economic Review, American Economic Association, vol. 63(4), pages 621-33, September.
  8. Barry Eichengreen, 1987. "The impact of late nineteenth-century unions on labor earnings and hours: Iowa in 1894," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 40(4), pages 501-515, July.
  9. Dora L. Costa, 1997. "Less of a Luxury: The Rise of Recreation since 1888," NBER Working Papers 6054, National Bureau of Economic Research, Inc.
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