War and Pestilence as Labor Market Shocks: Manufacturing Wage Growth 1914-1919

Abstract

This paper explores the effect of mortalities from the 1918-1919 influenza pandemic and World War I on real wage growth in the manufacturing sectors of U.S. states from 1914 to 1919. The general hypothesis is that both events caused a significant decrease in the supply of manufacturing labor, thereby initially increasing the marginal product of labor and thus wages. The empirical results reveal that influenza mortalities led to a greater overall increase in real manufacturing wage growth, but the marginal effect on wage growth from an additional World War I combat mortality was greater than that from the influenza pandemic.

Keywords: Influenza Pandemic, World War I, Wages, Manufacturing, Labor Supply

JEL Classification: N62, N32, N92, I12