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Journal of Monetary Economics. 21(2), March 1988: 195-232. Kydland, Finn E. and Edward C. Prescott. ” Econometrica. 50(6), November 1982: 1345-70. Lebergott, Stanley. Manpower in Economic Growth: The American Record since 1800. New York: Economics Handbook Series, 1964. Leete, Laura and Juliet B. Schor. ” Industrial Relations. 33(1), January 1994: 25-43. Leontief, Wassily W. ” Journal of Political Economy. 54(1), February 1946: 76-79. Lewis, H. Gregg. ” Proceedings of the Industrial Relations Research Association.

He stresses (1986, pp. 9, 187) that wage gaps vary a lot from industry to industry, and are typically overestimated because union workers are expected to have more unmeasured human capital than nonunion workers (so that measured wage gaps are only part monopoly union power, and part human capital differences). With these caveats in mind, I construct Table 1 below by reproducing and extending Lewis’ (1963) Table 50, reporting by time period the relative wage gap for the “typical” unionized worker.

If we use the Stone-Geary utility function, which better fits the pre-1929 data, then the accounting is the same as in Table 2, except that ) ln c is replaced by ) ln (c-(). 338 for 1929-80 and 1929-96, respectively. Expenditure on nonsubsistence consumption also grows less than “expenditure” on leisure time, so tax rates implied by Stone-Geary utility also increase over time. 251, respectively. C. The Great Depression Implied tax rates rise dramatically in the early 1930's and persist for the decade.

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A Century of Labor-Leisure Distortions by University of Chicago


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