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Operations of "Unfettered" Labor Markets: Exit and Voice in American Labor Markets at the Turn of the Century


  • Price V. Fishback


The American economy at the turn of the century offers an excellent opportunity to study relatively unregulated labor markets. This essay discusses the operation of labor markets in the early 1900s. After examining the mobility of workers, the integration of geographically dispersed labor markets, and a case study of the extent of employer monopsony, we examine the extent to which workers received compensating differentials for workplace disamenities and the extent to which competition among employers reduced discrimination. During this period, institutions like the company town, company union, and share cropping developed. These institutions are reexamined to determine the extent to which they were exploitative or helped resolve problems with transactions costs. Finally, reformers pressed for workers' compensation and laws regulating women's hours, child labor, and workplace safety. We examine the impact of progressive legislation and discuss the political economy of its passage.

Suggested Citation

  • Price V. Fishback, 1998. "Operations of "Unfettered" Labor Markets: Exit and Voice in American Labor Markets at the Turn of the Century," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 722-765, June.
  • Handle: RePEc:aea:jeclit:v:36:y:1998:i:2:p:722-765

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    References listed on IDEAS

    1. Ted Bergstrom, "undated". "Primogeniture, Monogamy, and Reproductive Success in a Stratified Society," Papers _031, University of Michigan, Department of Economics.
    2. Donald Cox & Oded Stark, 1996. "Intergenerational Transfers and the Demonstration Effect," Boston College Working Papers in Economics 329., Boston College Department of Economics.
    3. Ted Bergstrom, "undated". "On the Economic of Polygyny," Papers _032, University of Michigan, Department of Economics.
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    5. Bergstrom, Theodore C., 1993. "A survey of theories of the family," Handbook of Population and Family Economics,in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 2, pages 21-79 Elsevier.
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    Cited by:

    1. Roland Vaubel, 2008. "The political economy of labor market regulation by the European Union," The Review of International Organizations, Springer, vol. 3(4), pages 435-465, December.
    2. Susan Averett & Howard Bodenhorn & Justas Staisiunas, 2003. "Unemployment Risk and Compensating Differential in Late-Nineteenth Century New Jersey Manufacturing," NBER Working Papers 9977, National Bureau of Economic Research, Inc.
    3. Robert S. Chase, 2001. "Labor Market Discrimination During Post-Communist Transition: A Monopsony Approach to the Status of Latvia's Russian Minority," William Davidson Institute Working Papers Series 381, William Davidson Institute at the University of Michigan.
    4. Alejandro Donado & Klaus Wa¨lde, 2012. "How trade unions increase welfare," Economic Journal, Royal Economic Society, vol. 122(563), pages 990-1009, September.
    5. repec:wsi:wschap:9789812798091_0017 is not listed on IDEAS
    6. Addison, John T., 2006. "Politico-Economic Causes of Labor Regulation in the United States: Rent Seeking, Alliances, Raising Rivals' Costs (Even Lowering One's Own?), and Interjurisdictional Competition," IZA Discussion Papers 2381, Institute for the Study of Labor (IZA).
    7. Josefa Ramoni Perazzi, 2007. "The compensating differential principle in the public and private sector: A multivariate statistical analysis approach," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 32(24), pages 95-112, july-dece.
    8. Price V. Fishback & Rebecca Holmes & Samuel Allen, 2008. "Lifting the Curse of Dimensionality: Measures of the Labor Legislation Climate in the States During the Progressive Era," NBER Working Papers 14167, National Bureau of Economic Research, Inc.
    9. Joshua L. Rosenbloom & William A. Sundstrom, 2009. "Labor-Market Regimes in U.S. Economic History," NBER Working Papers 15055, National Bureau of Economic Research, Inc.
    10. Guido Friebel & Sergei Guriev, 2000. "Should I Stay or Can I Go? Worker Attachment in Russia," Working Papers w0008, Center for Economic and Financial Research (CEFIR).
    11. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2009. "The Effects of Multinational Production on Wages and Working Conditions in Developing Countries," World Scientific Book Chapters,in: Globalization And International Trade Policies, chapter 17, pages 623-687 World Scientific Publishing Co. Pte. Ltd..
    12. Szabó, Zsolt, 2012. "A kivonulás-tiltakozás-hűség fogalomhármas közgazdaságtani relevanciája a 21. században
      [The relevance of "exit, voice and loyalty" theory in 21st-century economics]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1311-1335.
    13. John E. Murray, 2011. "Asymmetric Information and Countermeasures in Early Twentieth‐Century American Short‐Term Disability Microinsurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 78(1), pages 117-138, March.
    14. Howard Bodenhorn, 2017. "Were Nineteenth-Century Industrial Workers Permanent Income Savers?," NBER Working Papers 23948, National Bureau of Economic Research, Inc.
    15. Assaad, Ragui & Tunali, Insan, 2002. "Wage formation and recurrent unemployment," Labour Economics, Elsevier, vol. 9(1), pages 17-61, February.
    16. Murray, John E. & Nilsson, Lars, 2007. "Accident risk compensation in late imperial Austria: Wage differentials and social insurance," Explorations in Economic History, Elsevier, vol. 44(4), pages 568-587, October.
    17. Michael Huberman & Chris Minns, 2005. "Hours of Work in Old and New Worlds: The Long View, 1870-2000," The Institute for International Integration Studies Discussion Paper Series iiisdp95, IIIS.
    18. Alston, Lee J. & Dupre, Ruth & Nonnenmacher, Tomas, 2002. "Social reformers and regulation: the prohibition of cigarettes in the United States and Canada," Explorations in Economic History, Elsevier, vol. 39(4), pages 425-445, October.

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