Did Henry Ford Pay Efficiency Wages?

Daniel M.G. Raff and Lawrence Summers

No 2101, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines Henry Ford's introduction of the five-dollar day in 1914 in an effort to evaluate the relevance of efficiency wage theories of wage and employment determination. Our general conclusion is that the Ford experience is strongly supportive of the relevance of these theories. Ford's decision to dramatically increase wages is most plausibly portrayed as the consequence of labor problems of the kind stressed by efficiency wage theorists. The structure of the five dollar day program is consistent with the predictions of efficiency wage theories. There is vivid evidence that the five-dollar day resulted in substantial queues for Ford jobs. Finally, significant increases in productivity and profits at Ford accompanied the introduction of the five-dollar day.

Date: 1986-12
Note: EFG PR
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published as Journal of Labor Economics, Vol.5, No. 4, Pt. 2, pp. S57-S86, (October 1987).

Downloads: (external link)
http://www.nber.org/papers/w2101.pdf (application/pdf)

Related works:
Journal Article: Did Henry Ford Pay Efficiency Wages? (1987)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:2101

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w2101

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().