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Labor Earnings Inequality in Manufacturing during the Great Depression

Published online by Cambridge University Press:  20 April 2020

Felipe Benguria ,
Chris Vickers  and
Nicolas L. Ziebarth
Felipe Benguria
Affiliation:
Assistant Professor, University of Kentucky, 550 South Limestone, Lexington, KY40506. E-mail: [email protected]
Chris Vickers
Affiliation:
Associate Professor, Auburn University, 133 Miller Hall, Auburn, AL36849. E-mail: [email protected]
Nicolas L. Ziebarth
Affiliation:
Associate Professor, Auburn University, 133 Miller Hall, Auburn, AL36849, and National Bureau of Economics, 1050 Massachusetts Avenue, Cambridge, MA02138. E-mail: [email protected]
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Abstract

We study labor earnings inequality during the Great Depression using establishment-level information from the Census of Manufactures (COM). Inequality, as measured by the interquartile range in earnings per worker, declines by 10 log points between 1929 and 1933. However, by 1935, this difference has recovered to its 1929 level. In a decomposition, this decline and then rise in inequality is entirely explained by returns to observable factors, most notably the skill premium and regional differentials. The exit of establishments plays an important role in the initial decline in inequality but barely any role in the recovery.

Type
Article
Information
The Journal of Economic History , Volume 80 , Issue 2 , June 2020 , pp. 531 - 563
Copyright
© The Economic History Association 2020

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Footnotes

We thank participants at the NBER SI 2015 DAE, Census Bureau, William & Mary, UW–La Crosse, Florida State, Gettysburg College, Northwestern University, EBHS 2017, the Washington Area Economic History Seminar, the University of Michigan, and the University of Guelph for useful comments. We thank Dave Donaldson, Rick Hornbeck, and Jamie Lee for providing county-level data for the 1929 Census of Manufactures. We thank Miguel Morin for providing some of the published totals for the 1935 Census of Manufactures. The National Science Foundation (SES #1122509 and #1459263) and the University of Iowa provided funding.

References

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