Productivity in Manufacturing and the Length of the Working Day: Evidence from the 1880 Census of Manufactures
Margo, Robert A.
We use data from the manuscript census of manufacturing to estimate the effects of the length of the working day on output and wages. We find that the elasticity of output with respect to daily hours was positive but less than one - that is, there were diminishing returns to increases in hours. Holding constant annual days of work, the average annual wage was positively related to daily hours but, again, the elasticity was less than one. At the modal value of daily hours - ten hours per day - it appears that, from the standpoint of employers, the marginal benefits of a shorter working day - a lower wage bill - were approximately offset by the marginal cost - lower output.