Queen's Economics Department Working Paper No. 1229
Based largely on the Fifteenth Annual Report of the U.S. Department of Labor, published in 1900, we have built a sample of wages and hours for roughly fifty countries in six continents that covers the period 1890-1900. The Report, which is drawn from official (national) publications, gives information on normal or usual hours and earnings per week at the establishment level. To our knowledge, this is the most extensive data set of its kind totaling about 15,000 observations. We combine the data set with other country-specific evidence to derive implications about labour supply. The data reveal a cross-country supply curve that was markedly backward-bending. In addition, for a given wage level, we find a positive relation between a country's per-capita income and work hours. We interpret the patterns by proposing a standard utility function in consumption and hours of work, where a minimal level of consumption is introduced as a constraint. We interpret that minimum more broadly than biological subsistence. Rather minimal consumption is assumed to increase with the average income of a country. We also explore the possible role of climate in affecting the consumption constraint. Given the size of the data set, although coverage is uneven, we are able to estimate labour supply curves within countries and regions, in addition to making overall comparisons of work hours across countries. Our preliminary work suggests that a consumption constraint played a key role in the negative relation between wages and hours of work within countries, and that across countries higher average incomes, which effectively raised the constraint, promoted greater work hours.