The North-South Wage Gap, Before and After the Civil War

Abstract

In an economy with "national" factor markets, the factor price effects of a permanent, regional specific shock register everywhere, perhaps with a brief lag. The United States in the nineteenth century does not appear to have been such an economy. Using data for a variety of occupations, I document that the Civil War occasioned a dramatic divergence in the regional structure of wages --in particular, wages in the South Atlantic and South Central states relative to the North fell sharply after the War. The divergence was immediate, being apparent as early as 1866. It was persistent: for none of the occupations examined did the regional wage structure return to its ante-bellum configuration by century's end. The divergence cannot be explained by the changing racial composition of the Southern wage labor force after the War, but does appear consistent with a sharp drop in labor productivity in Southern agriculture. I also use previously neglected data to argue that the South probably experienced a decline in the relative price of non-traded goods after the War.

Health, human capital, and African-American migration before 1910

“…In the aftermath of the Civil War per capita income fell sharply in the South relative to the non-South, as did wages (Goldin 1979; Margo 2004). The poor state of the Southern economy after the War created a strong incentive for migration from the region, particularly for former slaves.…”

The rural/urban wage gap in the industrialisation of Russia, 1884-1910

“…1 In the US, spatial segmentation between North and South remained important -probably due to lagging productivity of agriculture in the South -after the Civil War (Margo 2002). It shows that the gap will widen in early industrialisation and then narrow as urban job creation generates greater diversity and opportunity.…”

Fertility and the Price of Children: Evidence from Slavery and Slave Emancipation

“…First, by small plot farming and sharecropping and because the labor available for hire in the postwar labor market was negatively selected in terms productivity of Southern labor declined by approximately 30-40 percent between 1860 and 1880 (Fogel and Engerman 1974) and, for a given number of labor hours in the market, the productivity of those hours productivity would the (effective) cost of labor not change (Margo 2004). Emancipation represented a positive shock to the price of non-family labor in the postbellum South for two reasons.…”

“…As a result, the productivity of Southern labor declined by approximately 30–40 percent between 1860 and 1880 (Fogel and Engerman 1974) and, for a given number of labor hours in the market, the productivity of those hours declined. Only if hourly wages fully adjusted to reflect the reductions in productivity would the (effective) cost of labor not change (Margo 2004). Second, former slaves participated in the labor market at a lower rate than they had under coercion.…”