Labour markets in the interwar period and economic recovery in the UK and the USA

Hatton, Timothy J.; Thomas, Mark

doi:10.1093/oxrep/grq023

Cited by 22 publications

(19 citation statements)

References 48 publications

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“…There was a distinct increase in the equilibrium unemployment rate in the UK in the 1920s associated with increased union militancy, the development of centralized but uncoordinated wage setting, and the advent of a national system of unemployment insurance; besides the UK recovery in 1 We also run the KPZ test allowing for an intercept and a trend in the stationary regimes and the results (in terms of the number and the date of the breaks) remain the same. the early 1920s was also hampered by the sharp cut in working hours (Hatton and Thomas, 2010). By contrast, such institutional developments were largely absent in USA and the fall in working hours was more easily accommodated.…”

Section: Data and Empirical Resultsmentioning

confidence: 99%

“…As a result of the combination of shocks and labour market institutions, unemployment persistence appeared around 1922 for UK and 1930 for USA. Before World War I and the interwar period labour markets were relatively fluid with high labour turnover and relatively transitory unemployment; however, institutional change weakened the labour market equilibrating mechanisms (Hatton and Thomas, 2010).…”

Section: Data and Empirical Resultsmentioning

confidence: 99%

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Centurial evidence of breaks in the persistence of unemployment

Ghoshray

Stamatogiannis

2015

Economics Letters

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h i g h l i g h t s• We examine unemployment data for the UK and USA that spans over a century.• We employ a novel procedure that tests for switches in the persistence of the data.• Both UK and USA show a switch from the natural rate to hysteresis. a b s t r a c tA novel procedure is applied to test for switches between hysteresis and the natural rate theory over more than a century of UK and USA unemployment data. For both the countries we see a period conforming to hysteresis starting in the early 1920s for the UK and 1930 for USA.

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Section: Data and Empirical Resultsmentioning

confidence: 99%

Section: Data and Empirical Resultsmentioning

confidence: 99%

Centurial evidence of breaks in the persistence of unemployment

Ghoshray

Stamatogiannis

2015

Economics Letters

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“…Despite the debated conclusion of Cole and Ohanian (2001) that the rise in real wages was a minor contributor to the contraction, recent work by Hatton and Thomas (2010) and Ohanian (2009) continues to point to high real product wages (i.e., wages divided by sectoral output price) as a key contributor.…”

Section: Introductionmentioning

confidence: 99%

Re-Examining the Role of Sticky Wages in the U.S. Great Contraction: A Multisectoral Approach

Amaral¹,

MacGee²

2016

Working Paper (Federal Reserve Bank of Cleveland)

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We quantify the role of contractionary monetary shocks and nominal wage rigidities in the U.S. Great Contraction. In contrast to conventional wisdom, we fi nd that the average economy-wide real wage varied little over 1929-33, although real wages rose signifi cantly in some industries. Using a two-sector model with intermediates and nominal wage rigidities in one sector, we fi nd that contractionary monetary shocks can account for only a quarter of the fall in GDP, and as little as a fi fth at the trough. Intermediate linkages play a key role, as the output decline in our benchmark is roughly half as large as in a two-sector model without intermediates.JEL Classication: E20, E30, E50.

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“…Brunner (1981) and Eichengreen and Hatton (1988) for contributions to research on the Great Depression and interwar labor markets. Dimsdale et al (1989) present a study of the interwar labor market in the UK and Hatton and Thomas (2010) offer a comparative perspective on US and UK interwar labor markets. 2 Discussions and analyses of Swedish economic policies during the interwar period are contained in e.g.…”

Section: Introductionmentioning

confidence: 99%

Wage and employment determination in volatile times: Sweden 1913–1939

Holmlund

2012

Cliometrica

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The paper studies wage and employment determination in the Swedish business sector from the mid-1910s to the late 1930s. This period includes the boom and bust cycle of the early 1920s as well as the Great Depression of the early 1930s. The events of the early 1920s are particularly intriguing, involving inflation running at an annual rate of 30 percent followed by a period of sharp deflation where nominal wages and prices fell by 30 percent and unemployment increased from 5 to 30 percent. We examine whether relatively standard wage and employment equations can account for the volatile economic development during the interwar years. By and large, the answer is a qualified yes. Industry wages were responsive to industry-specific firm performance, suggesting a significant role for "insider forces" in wage determination. Unemployment had a strong downward impact on wages. There is evidence that reductions in working time added to wage pressure; yet estimates of labor demand equations suggest that cuts in working time may have slightly increased employment as firms substituted workers for hours. Terms of use: Documents inJEL-Code: J230, J310, N140, N340.

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Labour markets in the interwar period and economic recovery in the UK and the USA

Cited by 22 publications

References 48 publications

Centurial evidence of breaks in the persistence of unemployment

Centurial evidence of breaks in the persistence of unemployment

Re-Examining the Role of Sticky Wages in the U.S. Great Contraction: A Multisectoral Approach

Wage and employment determination in volatile times: Sweden 1913–1939

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