Hostname: page-component-77f85d65b8-jkvpf Total loading time: 0 Render date: 2026-04-16T14:15:33.023Z Has data issue: false hasContentIssue false
  • English
  • Français

A Golden Age? Unemployment and the American Labor Market, 1880–1910

Published online by Cambridge University Press:  27 February 2004

JOHN A. JAMES  and
MARK THOMAS
JOHN A. JAMES
Affiliation:
Professor, Department of Economics, University of Virginia, Charlottesville, VA 22903. E-mail: jaj8y@virginia.edu.
MARK THOMAS
Affiliation:
Associate Professor, Department of History, University of Virginia, Charlottesville, VA 22903. E-mail: mt4w@virginia.edu.
Get access Rights & Permissions [Opens in a new window]

Abstract

We calculate the natural rate of unemployment in 1909 by first estimating equations for the incidence and time lost in unemployment on a pooled dataset integrating the manuscript sample of the 1910 census and state BLS surveys and then simulating a counterfactual unemployment rate as if the economy had been on trend that year with business-cycle effects neutralized. Following a similar procedure for the 1960s, we find the natural rate in the earlier period to have been substantially higher. The demise of casual unskilled labor, or floaters, seems to have been an important contributory factor.

Information

Type
ARTICLES
Information
The Journal of Economic History , Volume 63 , Issue 4 , December 2003 , pp. 959 - 994
Copyright
© 2003 The Economic History Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

References

Abramovitz Moses. 1950 Inventories and Business Cycles. New York: National Bureau of Economic Research
Akerlof George A., and Janet L. Yellen. 1985 Unemployment through the Filter of Memory. Quarterly Journal of Economics 100, no. 3 747–73.Google Scholar
Atack Jeremy, Fred Bateman, and Robert Margo. 2002 Part-Year Operation in Nineteenth-Century American Manufacturing: Evidence from the 1870 and 1880 Censuses. This Journal 62, no. 3 792– 809.Google Scholar
Baker Michael. 1992 Unemployment Duration: Compositional Effects and Cyclical Variability. American Economic Review 82, no. 1 313–21.Google Scholar
Ball Laurence, and N. Gregory Mankiw. 2002 The NAIRU in Theory and Practice. Journal of Economic Perspectives 16, no. 4 115–36.Google Scholar
Barro Robert. 1978 Unanticipated Money, Output, and the Price Level in the United States. Journal of Political Economy 86, no. 4 549–80.Google Scholar
Barsky Robert. 1987 The Fisher Hypothesis and the Forecastability and Persistence of Inflation. Journal of Monetary Economics 19, no. 1 3– 24.Google Scholar
Brissenden Paul, and Emil Frankel. 1922 Labor Turnover in Industry. New York: Macmillan
Calomiris Charles, and Christopher Hanes. 1998 Consistent Output Series for the Antebellum and Postbellum Periods: Issues and Preliminary Results. In Business Cycles since 1820: New International Perspectives from Historical Evidence, edited by Trevor Dick, 15– 27. Cheltenham, UK: Edward Elgar
Carter Susan B., Roger L. Ransom, and Richard Sutch. Those ‘Cold, Enduring Arabic Characters’: The Quality of Late Nineteenth-Century State Labor Bureau Statistics. Unpublished Manuscript.
Carter Susan, and Elizabeth Savoca. 1990 Labor Mobility and Lengthy Jobs in Nineteenth-Century America. This Journal 50, no. 1 1– 16.Google Scholar
Carter Susan, and Richard Sutch. 1992 The Great Depression of the 1890s: New Suggestive Estimates of the Unemployment Rate. In Research in Economic History, Vol. 14, edited by Roger Ransom, 347–76. Greenwich, CT.: JAI Press
Clark Kim, and Lawrence Summers. 1979 Labor Market Dynamics and Unemployment: A Reconsideration. Brookings Papers on Economic Activity 1, no. 79 13– 60.Google Scholar
Dynarski Mark, and Steven Sheffrin. The Behavior of Unemployment Durations over the Cycle. Review of Economics and Statistics 72, no. 2 1990 350–55.Google Scholar
Engerman Stanley, and Claudia Goldin. 1994 Seasonality in Nineteenth-Century Labor Markets. In American Economic Development in Historical Perspective, edited by T. Weiss and D. Schaefer, 99– 126. Stanford, CA: Stanford University Press
Feldman H. 1925 The Regularization of Employment. New York: Harper and Brothers
Fishback Price V. Operations of ‘Unfettered’ Labor Markets: Exit and Voice in American Labor Markets at the Turn of the Century. Journal of Economic Literature 36, no. 2 1998 722–65.Google Scholar
Florence P. Sargent. 1924 Economics of Fatigue and Unrest and the Efficiency of Labour in English and American Industry. London: Allen and Unwin
Friedman Milton. 1968 The Role of Monetary Policy. American Economic Review 58, no. 1 1– 15.Google Scholar
Goldin Claudia. 2000 Labor Markets in the Twentieth Century. In The Cambridge Economic History of the United States, Vol. 3, The Twentieth Century, edited by Stanley L. Engerman and Robert E. Gallman, 549– 623. New York: Cambridge University Press
Gordon Robert J., 1986 The American Business Cycle. Chicago: University of Chicago Press
———. 1993 Macroeconomics, 6th Ed. New York: Harper Collins
Hall Robert E. 1979 A Theory of the Natural Unemployment Rate and the Duration of Employment. Journal of Monetary Economics 5, no. 2 153–69.Google Scholar
Hanes Christopher. 1993 The Development of Nominal Wage Rigidity in the Late 19th Century. American Economic Review 83, no. 4 732–56.Google Scholar
Hatton Timothy J., and Jeffrey G. Williamson. 1991 Unemployment, Employment Contracts, and Compensating Wage Differentials: Michigan in the 1890s. This Journal 51, no. 3 605–32.Google Scholar
Heckman James. 1976 The Common Structure of Statistical Models of Truncation, Sample Selection, and Limited Dependent Variables and a Simple Estimator for Such Models. The Annals of Economic and Social Measurement, 5, no. 4 475–92.Google Scholar
———. 1979 Sample Selection Bias as a Specification Error. Econometrica 47, no. 1 153–61.
Horvath Frances W. 1982 Forgotten Unemployment: Recall Bias in Retrospective Data. Monthly Labor Review 105, no. 3 40– 43.Google Scholar
Jacoby Sanford M. 1985 Employing Bureaucracy. New York: Columbia University Press
———. 1983 Industrial Labor Mobility in Historical Perspective. Industrial Relations 22, no. 2 261–82.
Jacoby Sanford M., and Sunil Sharma. 1992 Employment Duration and Industrial Labor Mobility in the United States, 1880–1980. This Journal 52, no. 1 161–79.Google Scholar
James John A. 1994 Job Tenure in the Gilded Age. In Labour Market Evolution, edited by George Grantham and Mary MacKinnon, 185– 204. London: Routledge
———. 1995 Reconsidering the Pattern of American Unemployment before the First World War. Economica 62, no. 247 291– 311.
Johnson G. E., and P. R. G. Layard. 1986 The Natural Rate of Unemployment: Explanation and Policy. In Handbook of Labor Economics, Vol. 2, edited by O. Ashenfelter and R. Layard, 921–99. Amsterdam: Elsevier Science Publishers
Keyssar Alexander. 1986 Out of Work: The First Century of Unemployment in Massachusetts. Cambridge: Cambridge University Press
Lauck W. Jett, and Edgar Sydenstricker. 1917 Conditions of Labor in American Industries. New York: Funk and Wagnalls Co.
Lebergott Stanley. 1992 Historical Unemployment Series: A Comment. In Research in Economic History, Vol. 14, edited by Roger Ransom, 377–86. Greenwich, CT: JAI Press
———. 1964 Manpower in Economic Growth. New York: McGraw-Hill
Leung Siu Fai, and Shihti Yu. 1996 On the Choice between Sample Selection and Two-Part Models. Journal of Econometrics 72, no. 1–2 197– 229.Google Scholar
Lescohier Don. 1919 The Labor Market. New York: Macmillan
Lewisohn Sam A., Earnest G. Draper, John R. Commons, and Don D. Lescohier. 1925 Can Business Prevent Unemployment? New York: A.A. Knopf
Manning Willard G., Naihua Duan, and W. H. Rogers. 1987 Monte Carlo Evidence on the Choice between Sample Selection and Two-Part Models. Journal of Econometrics 35, no. 1 59– 82.Google Scholar
Margo Robert. The Incidence and Duration of Unemployment: Some Long-Term Comparisons. Economic Letters 32, no. 3 1990 217–20.Google Scholar
———. 2000 The Labor Force in the Nineteenth Century. In The Cambridge Economic History of the United States, Vol. 2, The Long Nineteenth Century, edited by Stanley L. Engerman and Robert E. Gallman, 207–43. New York: Cambridge University Press
———. 1990 Unemployment in 1910: Some Preliminary Findings. In Unemployment and Underemployment in Historical Perspective, edited by E. Aerts and B. Eichengreen, 51– 60. Leuven: Leuven University Press
Miron Jeffrey A., and Christina D. Romer. 1990 A New Monthly Index of Industrial Production, 1884–1940. This Journal 50, no. 2 321–37.Google Scholar
Moen Jon R. 1988 From Gainful Employment to Labor Force: Definitions and a New Estimate of Work Rates of American Males, 1860 to 1980. Historical Methods 21, no. 2 149–59.Google Scholar
Motley Brian. 1990 Has There Been a Change in the Natural Rate of Unemployment? Federal Reserve Bank of San Francisco Economic Review, no. 1 3– 16.Google Scholar
Preston Samuel H. 1989 Census of Population, 1910: Public Use Sample. Philadelphia: University of Pennsylvania, Population Studies Center
Rees Albert. 1961 Real Wages in Manufacturing, 1890–1914. Princeton, NJ: Princeton University Press
Rissman Ellen. 1986 What is the Natural Rate of Unemployment? Federal Reserve Bank of Chicago Economic Perspectives, 3– 17.Google Scholar
Rosenbloom Joshua L. 2002 Looking for Work, Searching for Workers: American Labor Markets during Industrialization. New York: Cambridge University Press
Rosenbloom Joshua L., and William Sundstrom. 1994 The Decline in Hours of Work in US Labour Markets, 1890–1903. In Labour Market Evolution, edited by G. Grantham and M. MacKinnon, 161–84. London: Routledge
Romer Christina D. 1986 New Estimates of Prewar Gross National Product and Unemployment. Journal 46, no. 2 341–52.Google Scholar
———. 1986 Spurious Volatility in Historical Unemployment Data. Journal of Political Economy 94, no. 1 1– 37.
Sautter Udo. 1991 Three Cheers for the Unemployed: Government and Unemployment before the New Deal. New York: Cambridge University Press
Sider Hal. 1985 Unemployment Duration and Incidence. American Economic Review 75, no. 3 461–72.Google Scholar
Slichter Sumner. 1919 The Turnover of Factory Labor. New York: D. Appleton and Co.
Summers Lawrence H. 1986 Why is the Unemployment Rate So Very High near Full Employment? Brookings Papers on Economic Activity, no. 2 339–83.Google Scholar
Sundstrom William A. 1992 Rigid Wages or Small Equilibrium Adjustments? Evidence from the Contraction of 1893. Explorations in Economic History 29, no. 4 430–55.Google Scholar
———. 1990 Was There a Golden Age of Flexible Wages? Evidence from Ohio Manufacturing, 1892–1910. This Journal 50, no. 2 309–20.
Taylor John. 1986 Improvements in Macroeconomic Stability: The Role of Wages and Prices. In The American Business Cycle, edited by Robert J. Gordon, 639–59. Chicago: University of Chicago Press
Thorp Willard. 1926 Business Annals. New York: National Bureau of Economic Research
U.S. Bureau of the Census. 1975 Historical Statistics of the United States. Washington, DC: GPO
———. 1910 Instructions to Enumerators. Washington, DC: GPO
U.S. Commissioner of Labor. 1904 Eighteenth Annual Report of the Commissioner of Labor: Cost of Living and Retail Prices of Food. Washington, DC: GPO
U.S. Immigration Commission. 1911 Immigrants in Industries: Part 23: Summary Report on Immigrants in Manufacturing and Mining. Washington, DC: GPO
Vedder Richard, and Lowell Gallaway. 1993 Out of Work. New York: Holmes and Meier
Weir David. 1992 A Century of U.S. Unemployment, 1890–1990: Revised Estimates and Evidence for Stabilization. In Research in Economic History, Vol. 14, edited by Roger Ransom, 301–46. Greenwich, CT: JAI Press
Whatley Warren C., and Stan Sedo. The Origins of Modern Labor Markets: New Evidence from Company Personnel Records. Unpublished Manuscript.
Woytinsky Wladimir S. 1953 Employment and Wages in the United States. New York: Twentieth Century Fund
———. 1942 Three Aspects of Labor Dynamics. New York: Social Science Research Council
Zarnowitz Victor. 1973 Orders, Production, and Investment: A Cyclical and Structural Analysis. New York: National Bureau of Economic Research