Labor Market Integration Before the Civil War
NBER Historical Working Paper No. 109
This paper uses newly collected archival evidence to examine various aspects of the geographic performance of American labor markets before the Civil War. Much of the paper addresses the evolution of regional differences in real wages, of interest to economic historians because they speak to the formation of a national labor market.' In the North, real wages followed a pattern of convergence: wages were highest initially on the frontier -- the Midwest -- but tended to decline relative to real wages in settled regions -- the Northeast -- as labor migrated to the frontier. In the South, regional wage gaps were generally smaller than in the North, but real wages in the South fell significantly below Northern levels beginning in the 1830's. In addition to regional differences, I also examine wage convergence at the level of local labor markets, proxied by counties, using manuscript census data for 1850 and 1860. I find strong evidence of regression to the mean: high wage counties in 1850 were far less likely to be high wage in 1860. Such evidence is consistent with the view that antebellum local labor markets were spatially integrated.
Published: Margo, Robert A. "Wages And Labor Markets Before The Civil War," American Economic Review, 1998, v88(2,May), 51-56.