NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Lifting the Curse of Dimensionality: Measures of the Labor Legislation Climate in the States During the Progressive Era

Price V. Fishback, Rebecca Holmes, Samuel Allen

NBER Working Paper No. 14167
Issued in July 2008
NBER Program(s):   DAE   LE   LS

One of the most difficult problems in the social sciences is measuring the policy climate in societies. Prior to the 1930s the vast majority of labor regulations in the U.S. were enacted at the state level. In this paper we develop several summary measures of labor regulation that document the changes in labor regulation across states and over time during the Progressive Era. The measures include an Employer-Share-Weighted Index (ESWI) that weights regulations by the share of workers affected and builds up the overall index from 17 categories of regulation; the number of pages of laws; appropriations for spending on labor issues per worker; and two nonparametric COORDINATES that summarize locations in a policy space. We describe the pluses and minuses of the measures, how strongly they are correlated, and show the stories that they tell about the changes in labor regulation during the progressive era. We then provide preliminary evidence on the extent to which the labor regulation measures are associated with political and economic correlates identified as important in histories of industrial relations and labor markets.

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Document Object Identifier (DOI): 10.3386/w14167

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