Working Paper: NBER ID: w22117
Authors: Suresh Naidu; Noam Yuchtman
Abstract: Although 19th century American labor markets were unencumbered by regulatory legislation, labor market institutions played an active role determining labor market outcomes and the distribution of income. We provide evidence of firm-specific rents in 19th century labor markets: employees in firms experiencing positive output price shocks earned significant wage premia, relative to very similar workers. Employees and employers bargained over rents in the labor contract, with workers striking to raise wages. We present data on strikes' frequency in the 19th century, and suggestive correlations between strikes and wages. The U.S. government supported employers in limiting strikes' efficacy. Strike-breaking actions included intervention by police and militia; employers often relied on less drastic, but still effective, judicial labor injunctions suppressing strikes. We document the rise of these injunctions, pointing to the important role played by the judicial branch in structuring (Northern) American labor market institutions prior to the rise of legislative regulation.
Keywords: No keywords provided
JEL Codes: N3; O10; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| output price shock (E31) | wage premia (J31) |
| strikes (J52) | wage levels (J31) |
| judicial labor injunctions (J52) | labor market dynamics (J29) |
| judicial labor injunctions (J52) | wage levels (J31) |
| replacement workers (J63) | success of strikes (J52) |
| success of strikes (J52) | wage negotiations (J52) |