Labour market adjustment to economic downturns in the Catalan textile industry, 1880-1910: did employers breach implicit contracts?

Jordi Domenech

Economic History Working Papers from London School of Economics and Political Science, Department of Economic History

Abstract: This paper studies the way workers and firms behaved in a highly cyclical sector such as the cotton textile industry, which encompassed 1/5 of the Catalan industrial workforce in the early 20th century. Using firm level evidence from the late 19th and early 20th centuries, the paper shows that, in spite of weak unionisation and the lack of regional or local collective bargaining institutions, piece rates in cotton spinning and weaving were not subject to competitive rate cuts and remained fixed over the cycle. When facing a negative demand shock, firms adjusted by reducing output, hours of work, labour productivity and employment. I argue that in the Catalan case the stability of piece rate lists depended on a highly flexible labour market for female workers, limiting the pressure of unemployed workers on prevailing wages.

JEL-codes: B1 J15 N0 O52 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2005-02
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