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Labour market adjustment to economic downturns in the Catalan textile industry, 1880-1910: did employers breach implicit contracts?

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  • Domenech, Jordi

Abstract

This paper studies the way workers and firms behaved in a highly cyclical sector such as the cotton textile industry, which encompassed 1/5 of the Catalan industrial workforce in the early 20th century. Using firm level evidence from the late 19th and early 20th centuries, the paper shows that, in spite of weak unionisation and the lack of regional or local collective bargaining institutions, piece rates in cotton spinning and weaving were not subject to competitive rate cuts and remained fixed over the cycle. When facing a negative demand shock, firms adjusted by reducing output, hours of work, labour productivity and employment. I argue that in the Catalan case the stability of piece rate lists depended on a highly flexible labour market for female workers, limiting the pressure of unemployed workers on prevailing wages.

Suggested Citation

  • Domenech, Jordi, 2005. "Labour market adjustment to economic downturns in the Catalan textile industry, 1880-1910: did employers breach implicit contracts?," Economic History Working Papers 22333, London School of Economics and Political Science, Department of Economic History.
  • Handle: RePEc:ehl:wpaper:22333
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    File URL: http://eprints.lse.ac.uk/22333/
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    References listed on IDEAS

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    1. Sundstrom, William A., 1990. "Was There a Golden Age of Flexible Wages? Evidence from Ohio Manufacturing, 1892–1910," The Journal of Economic History, Cambridge University Press, vol. 50(02), pages 309-320, June.
    2. Carmichael, H Lorne & MacLeod, W Bentley, 2000. "Worker Cooperation and the Ratchet Effect," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 1-19, January.
    3. Gibbons, Robert, 1987. "Piece-Rate Incentive Schemes," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages 413-429, October.
    4. Huberman, Michael, 1986. "Invisible Handshakes in Lancashire: Cotton Spinning in the First Half of the Nineteenth Century," The Journal of Economic History, Cambridge University Press, vol. 46(04), pages 987-998, December.
    5. Lazonick, William, 1979. "Industrial Relations and Technical Change: The Case of the Self-Acting Mule," Cambridge Journal of Economics, Oxford University Press, vol. 3(3), pages 231-262, September.
    6. Huberman, Michael, 1991. "How did labor markets work in lancashire? more evidence on prices and quantities in cotton spinning, 1822-1852," Explorations in Economic History, Elsevier, vol. 28(1), pages 87-120, January.
    7. Huberman,Michael, 2010. "Escape from the Market," Cambridge Books, Cambridge University Press, number 9780521142663, May.
    8. Hanes, Christopher, 1993. "The Development of Nominal Wage Rigidity in the Late 19th Century," American Economic Review, American Economic Association, vol. 83(4), pages 732-756, September.
    9. Leunig, Tim, 2003. "Piece rates and learning: understanding work and production in the New England textile industry a century ago," Economic History Working Papers 22360, London School of Economics and Political Science, Department of Economic History.
    10. Gary R. Saxonhouse, 1977. "Productivity Change and Labor Absorption in Japanese Cotton Spinning 1891–1935," The Quarterly Journal of Economics, Oxford University Press, vol. 91(2), pages 195-219.
    11. Kiesling, L. Lynne, 1996. "Institutional Choice Matters: The Poor Law and Implicit Labor Contracts in Victorian Lancashire," Explorations in Economic History, Elsevier, vol. 33(1), pages 65-85, January.
    12. Lazear, Edward P, 1986. "Salaries and Piece Rates," The Journal of Business, University of Chicago Press, vol. 59(3), pages 405-431, July.
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    More about this item

    JEL classification:

    • N0 - Economic History - - General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925

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