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Wages, Prices, and Labor Markets before the Civil War

In: Strategic Factors in Nineteenth Century American Economic History: A Volume to Honor Robert W. Fogel

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  • Claudia Goldin
  • Robert A. Margo

Abstract

Two opposing views of the antebellum economy are tested. One is that aggregate economic activity was severely diminished and that unemployment was substantial and prolonged during several downturns. The alternative interpretation is that antebellum fluctuations were more apparent than real; nominal wages, not labor quantities, did most of the adjusting. We analyze data on real wages for laborers, artisans, and clerks across four regions (Northeast, North Central, South Atlantic, and South Central) during 1821 to 1856. Various time-series econometric methods reveal that shocks to real wages persisted even five years after an innovation, but that their impact eventually vanished. The persistence of shocks was less for agricultural labor than for other occupations, less for growing regions than for more mature ones, less for unskilled than for skilled labor, and probably less before 1860 than after. Although nominal wages and prices never strayed far from each other over the long run, the persistence of shocks was considerable during the 1821 to 1856 period. We, therefore, find evidence to support the first view of the antebellum economy, although the degree of unemployment in cities and industrial towns remains unknown.
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Suggested Citation

  • Claudia Goldin & Robert A. Margo, 1992. "Wages, Prices, and Labor Markets before the Civil War," NBER Chapters,in: Strategic Factors in Nineteenth Century American Economic History: A Volume to Honor Robert W. Fogel, pages 67-104 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:6958
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    Cited by:

    1. Grace, M. F. & J. L. Hotchkiss, 1993. "External Impacts on the Property-Liability Insurance Cycle," Working Papers 020, Risk and Insurance Archive, revised Feb 1995.
    2. Ojala, Jari & Pehkonen, Jaakko & Eloranta, Jari, 2016. "Deskilling and decline in skill premium during the age of sail: Swedish and Finnish seamen, 1751–1913," Explorations in Economic History, Elsevier, vol. 61(C), pages 85-94.
    3. Chulhee Lee, 2003. "Health and Wealth Accumulation: Evidence from Nineteenth-Century America," NBER Working Papers 10035, National Bureau of Economic Research, Inc.
    4. Woitek, Ulrich, 2003. "Height cycles in the 18th and 19th centuries," Economics & Human Biology, Elsevier, vol. 1(2), pages 243-257, June.
    5. Cormac O. Grada & Eugene N. White, 2002. "Who Panics During Panics? Evidence from a Nineteenth Century Savings Bank," NBER Working Papers 8856, National Bureau of Economic Research, Inc.
    6. Komlos, John, 2012. "A Three-Decade “Kuhnian” History of the Antebellum Puzzle: Explaining the shrinking of the US population at the onset of modern economic growth," Discussion Papers in Economics 12758, University of Munich, Department of Economics.
    7. Matthew J. Slaughter, 1995. "The Antebellum Transportation Revolution and Factor-Price Convergence," NBER Working Papers 5303, National Bureau of Economic Research, Inc.
    8. Robert A. Margo, 1999. "The History of Wage Inequality in America, 1820 to 1970," Economics Working Paper Archive wp_286, Levy Economics Institute.
    9. repec:eee:streco:v:41:y:2017:i:c:p:43-52 is not listed on IDEAS
    10. Komlos, John & Coclanis, Peter, 1997. "On the Puzzling Cycle in the Biological Standard of Living: The Case of Antebellum Georgia," Explorations in Economic History, Elsevier, vol. 34(4), pages 433-459, October.
    11. Robert A. Margo, 2000. "The History of Wage Inequality in America, 1920 to 1970," Macroeconomics 0004035, EconWPA.
    12. Margo, Robert A., 1999. "Regional Wage Gaps and the Settlement of the Midwest," Explorations in Economic History, Elsevier, vol. 36(2), pages 128-143, April.

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