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The Cyclical Behavior of Industrial Labor Markets: A Comparison of the Pre-War and Post-War Eras

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  • Ben S. Bernanke
  • James L. Powell

Abstract

This paper studies the cyclical behavior of a number of industrial labor markets of the pre-war (1923-1939) and post-war (1954-1982) eras. In the spirit of Burns and Mitchell we do not test a specific structural model of the labor market but instead concentrate on describing the qualitative features of the (monthly, industry-level) data.The two principal questions we ask are: First, how is labor input (as measured by the number of workers, the hours of work, and the intensity of utilization) varied over the cycle ? Second, what is the cyclical behaviorof labor compensation (as measured by real wages, product wages, and real weekly earnings) ? We study these questions in both the frequency domain and the time domain. Many of our findings simply reinforce, or perhaps refine, existing perceptions of cyclical labor market behavior. However, we do find some interesting differences between the pre-war and the post-war periods in ther elative use of layoffs and short hours in downturns, and in the cyclical behavior of the real wage.

Suggested Citation

  • Ben S. Bernanke & James L. Powell, 1984. "The Cyclical Behavior of Industrial Labor Markets: A Comparison of the Pre-War and Post-War Eras," NBER Working Papers 1376, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:1376 Note: EFG
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    Cited by:

    1. Bordo, Michael D. & Evans, Charles L., 1995. "Labor productivity during the Great Depression," Economics Letters, Elsevier, vol. 47(1), pages 41-45, January.
    2. Zwickl, Klara & Disslbacher, Franziska & Stagl, Sigrid, 2016. "Work-sharing for a sustainable economy," Ecological Economics, Elsevier, vol. 121(C), pages 246-253.
    3. Zwickl, Klara & Disslbacher, Franziska & Stagl, Sigrid, 2015. "Work-sharing for a sustainable economy," Ecological Economic Papers 4564, WU Vienna University of Economics and Business.
    4. Boskin, Michael J., 1988. "Issues in the Measurement and Interpretation of Saving and Wealth," CEPR Publications 244418, Stanford University, Center for Economic Policy Research.
    5. Hart, Robert A, 2001. "Hours and Wages in the Depression: British Engineering, 1926-1938," Explorations in Economic History, Elsevier, vol. 38(4), pages 478-502, October.
    6. Lawrence F. Katz, 1986. "Efficiency Wage Theories: A Partial Evaluation," NBER Chapters,in: NBER Macroeconomics Annual 1986, Volume 1, pages 235-290 National Bureau of Economic Research, Inc.
    7. Barlevy, Gadi & Tsiddon, Daniel, 2006. "Earnings inequality and the business cycle," European Economic Review, Elsevier, vol. 50(1), pages 55-89, January.
    8. Robert A. Hart, 2005. "General human capital and employment adjustment in the Great Depression: apprentices and journeymen in UK engineering," Oxford Economic Papers, Oxford University Press, vol. 57(1), pages 169-189, January.
    9. Bryan Perry & Kerk L. Phillips & David E. Spencer, 2012. "State-Level Evidence on the Cyclicality of Real Wages," BYU Macroeconomics and Computational Laboratory Working Paper Series 2012-05, Brigham Young University, Department of Economics, BYU Macroeconomics and Computational Laboratory.
    10. Hart, Robert A., 2008. "Piece work pay and hourly pay over the cycle," Labour Economics, Elsevier, vol. 15(5), pages 1006-1022, October.
    11. Todd E. Clark, 1995. "Do producer prices lead consumer prices?," Economic Review, Federal Reserve Bank of Kansas City, issue Q III, pages 25-39.
    12. Gunnar Bårdsen & Jurgen Doornik & Jan Tore Klovland, 2000. "A Wage Curve for the Interwar Labour Market: Evidence from a Panel of Norwegian Manufacturing Industries," Working Paper Series 1802, Department of Economics, Norwegian University of Science and Technology, revised 15 Apr 2001.
    13. Pierre Koning & Joëlle Noailly & Sabine Visser, 2007. "Do non-profits make a difference? Evaluating non-profit vis-à -vis for-profit organisations in social services," CPB Document 142, CPB Netherlands Bureau for Economic Policy Analysis.
    14. Klara Zwickl & Franziska Disslbacher & Sigrid Stagl, 2015. "Work-sharing for a sustainable economy," Ecological Economics Papers ieep4, Institute of Ecological Economics.
    15. Kevin X.D. Huang & Zheng Liu & Louis Phaneuf, 2004. "Why Does the Cyclical Behavior of Real Wages Change Over Time?," American Economic Review, American Economic Association, vol. 94(4), pages 836-856, September.
    16. Victor Zarnowitz, 1989. "Cost and Price Movements in Business Cycle Theories and Experience: Hypotheses of Sticky Wages and Prices (SEE ALSO WP3132-send out together)," NBER Working Papers 3131, National Bureau of Economic Research, Inc.
    17. Sweeney, James L. & Boskin, Michael J., 1985. "Analyzing Impacts of Potential Tax Policy Changes on U.S. Oil Security," CEPR Publications 244428, Stanford University, Center for Economic Policy Research.
    18. Hart, Robert A & Roberts, J Elizabeth, 2010. "Real wages, working time, and the Great Depression," Stirling Economics Discussion Papers 2010-09, University of Stirling, Division of Economics.
    19. Manne, Alan S., 1984. "On the Formulation and Solution of Economic Equilibrium Models," CEPR Publications 244427, Stanford University, Center for Economic Policy Research.

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