Fear and Lathing in the Michigan Furniture Industry: Employee-Based Discrimination a Century Ago

David Buffum and Robert Whaples

Economic Inquiry, 1995, vol. 33, issue 2, 234-52

Abstract: The authors analyze employee-based discrimination using historical data on workers' attributes from Michigan's furniture industry. The data provide compelling evidence of employee-based discrimination in the form of a compensating wage differential. A one percentage point decrease in the share of the work force from the worker's own ethnic group increased the wage about 0.1 percent. This response was larger in small firms, in small towns, and among certain ethnic groups. Protestants were generally paid more to work with Catholics. The additional labor costs generated by employee-based discrimination were probably offset by several benefits that rendered complete segregation unnecessary. Copyright 1995 by Oxford University Press.

Date: 1995
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