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Working Paper 2006-018C

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"War and Pestilence as Labor Market Shocks: U.S. Manufacturing Wage Growth 1914-1919"
by Thomas A. Garrett

This paper explores the effect of mortalities from the 1918 influenza pandemic and World War I on wage growth in the manufacturing sectors of U.S. states and cities from 1914 to 1919. The hypothesis is that both events caused a decrease in manufacturing labor supply, thereby initially increasing the marginal product of labor and wages. The results reveal that states and cities having had greater influenza mortalities experienced greater wage growth – roughly 2 to 3 percentage points for a 10 percent change in per capita mortalities. World War I combat mortalities also had a positive, but smaller, effect on wage growth.

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Category > Applied Microeconomics
Category > Regional Economics
Author > Thomas A. Garrett