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European economic integration and the labour compact, 1850 1913

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  • Huberman, Michael
  • Lewchuk, Wayne

Abstract

Globalization was a fact of life in Europe before 1913, but as trade shares increased, so did wage and employment instability. Faced by growing pressure from workers, national authorities established labour compacts - a packet of labour market regulations and social insurance programs - that defended workers against the risks they faced in and outside the factory. The labour compact provided workers with insurance because it compressed wage structures. We construct an index of labour market regulations and social insurance schemes for seventeen European countries and find that the extent of the labour compact varied with the level of openness. We conclude that the labour compact gave workers reason to support free trade because it protected them from external risk. Contrary to the received view, globalization before 1913 was compatible with state intervention. Our findings are consistent with Rodrik's and Agell's for the period after 1945. La mondialisation fut présente dans toute son ampleur en Europe dans la période avant 1913. Or, la croissance des échanges internationaux a suscité l'instabilité des salaires et des emplois. Face à la demande des travailleurs pour des garantis contre l'insécurité, les autorités nationales ont établi des accords de travail composés de programmes d'assurance chômage et de compensation pour les accidents de travail, ainsi que d'autres mesures fixant la journée du travail et assurant l'inspection des entreprises. Ces accords ont donné aux travailleurs un type d'assurance car ils comprimaient les structures des salaires. Dans cet article, on construit pour dix-sept pays européens un indice combinant des réglementations dans les marchés du travail et des programmes d'assurance sociale. L'indice varie positivement avec le volume des échanges internationaux. On conclut que les accords de travail ont donné une raison pour les travailleurs de supporter le libre-échange. Donc, dans les années avant 1913, la mondialisation était associée à l'
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  • Huberman, Michael & Lewchuk, Wayne, 2003. "European economic integration and the labour compact, 1850 1913," European Review of Economic History, Cambridge University Press, vol. 7(01), pages 3-41, April.
  • Handle: RePEc:cup:ereveh:v:7:y:2003:i:01:p:3-41_00
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    Cited by:

    1. KAMATA Isao, 2014. "Regional Trade Agreements with Labor Clauses: Effects on labor standards and trade," Discussion papers 14012, Research Institute of Economy, Trade and Industry (RIETI).
    2. Leandro Prados De La Escosura, 2016. "Economic freedom in the long run: evidence from OECD countries (1850–2007)," Economic History Review, Economic History Society, vol. 69(2), pages 435-468, May.
    3. Isao Kamata, 2015. "Labor Clauses in Regional Trade Agreements and Effects on Labor Conditions: An Empirical Analysis," Discussion papers e-14-019, Graduate School of Economics Project Center, Kyoto University.
    4. Sergio Espuelas, 2015. "The inequality trap. A comparative analysis of social spending between 1880 and 1930," Economic History Review, Economic History Society, vol. 68(2), pages 683-706, May.
    5. Matthias Morys & Guillaume Daudin, 2008. "Globalization, 1870-1914," Economics Series Working Papers 395, University of Oxford, Department of Economics.
    6. Kamata, Isao, 2016. "Labor clauses in regional trade agreements and effects on labor conditions : an empirical analysis," IDE Discussion Papers 609, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    7. Michael Huberman & Christopher M. Meissner, 2009. "Riding the Wave of Trade: Explaining the Rise of Labor Regulation in the Golden Age of Globalization," NBER Working Papers 15374, National Bureau of Economic Research, Inc.
    8. Sergio Espuelas Barroso & Margarita Vilar Rodriguez, 2008. "The determinants of social spending in Spain (1880-1960): Is Lindert right?," Working Papers in Economics 209, Universitat de Barcelona. Espai de Recerca en Economia.
    9. repec:spo:wpecon:info:hdl:2441/6145 is not listed on IDEAS
    10. Isao Kamatai, 2014. "Regional Trade Agreements with Labor Clauses: Effects on Labor Standards and Trade," Discussion papers e-13-007, Graduate School of Economics Project Center, Kyoto University.

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