The rise and fall of piecework–timework wage differentials: market volatility, labor heterogeneity, and output pricing

Citation

Hart RA & Roberts JE (2013) The rise and fall of piecework–timework wage differentials: market volatility, labor heterogeneity, and output pricing. Stirling Economics Discussion Paper, 2013-12.

Abstract
Based on detailed payroll data of blue collar male and female labor in Britain's engineering and metal working industrial sectors between the mid-1920s and mid-1960s, we provide empirical evidence in respect of several central themes in the piecework-timework wage literature. The period covers part of the heyday of pieceworking as well as the start of its post-war decline. We show the importance of relative piece rate flexibility during the Great Depression as well as during the build up to WWII and during the war itself. We account for the very significant decline in the differentials after the war. Labor market topics include piecework pay in respect of compensating differentials, labor heterogeneity, and the transaction costs of pricing piecework output.

Keywords
Piecework – timework hourly pay differentials; output fluctuations; labor heterogeneity; output pricing

JEL codes

• E32: Business Fluctuations; Cycles
• J31: Wage Level and Structure; Wage Differentials
• J33: Compensation Packages; Payment Methods
• N64: Economic History: Manufacturing and Construction: Europe: 1913-