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Title: Voluntary Equal Wage Policies in Discriminatory Markets: The Case of Ford Motor Company in the Early 20th Century

Citation Type: Miscellaneous

Publication Year: 2014

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Abstract: We analyze the impact of Ford Motor Companys compensation practices on the Detroit-area labor market from 1918-1947. Previous studies imply Ford paid race-independent wages, butits Black workers were sorted into undesirable departments. We extend these results using propensity score reweighting of Census data and Fords administrative records, and confirm Ford paid equal wages. We then develop a search model with discriminatory and equal-wage firms, to assess the potential impact of Fords policy on the larger labormarket. Calibrated simulations of the model suggest that Ford may have reduced the wage gap in S.E. Michigan by as much as 50%.

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Authors: Reynolds, C.Lockwood; Lanning, Jonathan A.

Publisher: Kent State University

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Race and Ethnicity

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