Wage Inequality in American Manufacturing, 1820-1940: New Evidence

Jeremy Atack, Robert Margo and Paul Rhode

No 31163, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The consensus view among economic historians is that wage inequality in American manufacturing followed an inverted-U path from the early nineteenth century until just before World War Two. The previous literature, however, has been unable to fully document this path over time, or fully assess the role of explanatory factors such as changes in firm organization and technology. We provide fresh evidence that allow us to better document the inverted-U and its causes. In the first part of the paper, we use the U.S. Department of Labor’s 1899 “Hand and Machine Labor” study to argue that wage inequality within manufacturing establishments rose over the nineteenth century, primarily because of increasing division of labor In the second part, we use data for Massachusetts from state reports to construct a new time series on wage inequality among production workers, which declined from the early 1890s to the late 1930s, mainly because of compression in the left tail of the distribution. Analysis of industry panel data suggest that electrification was the main factor behind the compression.

JEL-codes: N31 N32 N62 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-his and nep-mac
Note: DAE
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Forthcoming: Wage Inequality in American Manufacturing, 1820–1940: New Evidence , Jeremy Atack, Robert A. Margo, Paul W. Rhode. in The Economic History of American Inequality: New Evidence and Perspectives , Bailey, Boustan, and Collins. 2024

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