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  5. Labor Market Effects of Workweek Restrictions: Evidence from the Great Depression

Labor Market Effects of Workweek Restrictions: Evidence from the Great Depression

  • Price Fishback
  • Chris Vickers
  • Nicolas L. Ziebarth
American Economic Journal: Macroeconomics (Forthcoming)

Abstract

We study the effects of restrictions on the length of the workweek under the President’s Reemployment Agreement (PRA) of July 1933 and the National Industrial Recovery Act. We construct a model in which the equilibrium without such a workweek restriction has an inefficiently low level of employment. We find that employment rose by about 24% in the month following the imposition of the workweek restriction. Industries with longer workweeks before the PRA experienced 9.4% faster growth in hourly earnings following the PRA, but this increase was not sufficient to prevent a relative fall in weekly earnings in these industries.

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