Real wages, working time, and the Great Depression
AbstractWe 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.
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Bibliographic InfoPaper provided by University of Stirling, Division of Economics in its series Stirling Economics Discussion Papers with number 2010-09.
Date of creation: Sep 2010
Date of revision:
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Postal: Division of Economics, University of Stirling, Stirling, Scotland FK9 4LA
Phone: +44 (0)1786 467473
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the Great Depression; timework; piecework; working time; Real wage cyc licality;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-30 (All new papers)
- NEP-HIS-2010-10-30 (Business, Economic & Financial History)
- NEP-LAB-2010-10-30 (Labour Economics)
- NEP-MAC-2010-10-30 (Macroeconomics)
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