The effect of institutional regime change within the new deal on industrial output and labor markets

Jason E. Taylor and Todd C. Neumann

Explorations in Economic History, 2013, vol. 50, issue 4, 582-598

Abstract: Markets during the New Deal operated under a number of different institutional regimes, which were marked by executive orders, the passage of various pieces of legislation, and Supreme Court rulings on their constitutionality. Specifically, we break the New Deal period into the following six regimes: the Hundred Days, the President's Reemployment Agreement, the National Recovery Administration Codes of Fair Competition, the Schechter era, the National Labor Relations Act, and the Fair Labor Standards Act. Under these various regimes industrial markets were subject to different regulations relating to hourly wage rates, hours of work, the nature of competition, and unionization. Vector Autoregressive (VAR) regressions are run using a monthly panel of employment, weekly hours worked, wage rates, prices, and output for 11 major industries. We find that key policy and legal changes were associated with large and statistically significant movements in economic variables. Furthermore, changes in institutional regimes impacted different types of industries unevenly. For example, low-wage industries saw the largest increases in wages, and drops in output, after the mandated wage increases in 1933.

Keywords: New Deal; National Industrial Recovery Act; Labor policy; Wage rates; Unemployment; Great Depression (search for similar items in EconPapers)
JEL-codes: J38 N32 N42 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:exehis:v:50:y:2013:i:4:p:582-598

DOI: 10.1016/j.eeh.2013.07.001

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