Labor Market Institutions in the Gilded Age of American Economic History

31 Pages Posted: 28 Mar 2016

See all articles by Suresh Naidu

Suresh Naidu

Columbia University

Noam Yuchtman

University of California, Berkeley - Haas School of Business

Date Written: March 2016

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.

Suggested Citation

Naidu, Suresh and Yuchtman, Noam, Labor Market Institutions in the Gilded Age of American Economic History (March 2016). NBER Working Paper No. w22117. Available at SSRN: https://ssrn.com/abstract=2755409

Suresh Naidu (Contact Author)

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Noam Yuchtman

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

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