Wages, Prices, and Labor Markets Before the Civil War

36 Pages Posted: 8 Jan 2008 Last revised: 29 Sep 2010

See all articles by Claudia Goldin

Claudia Goldin

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Robert A. Margo

Boston University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: December 1989

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.

Suggested Citation

Goldin, Claudia and Margo, Robert A., Wages, Prices, and Labor Markets Before the Civil War (December 1989). NBER Working Paper No. w3198. Available at SSRN: https://ssrn.com/abstract=467641

Claudia Goldin (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States
617-495-3934 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-588-0356 (Phone)
617-868-2742 (Fax)

Robert A. Margo

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States
617-353-6819 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
28
Abstract Views
401
PlumX Metrics