Journal of Labor Economics
journal article
Did Henry Ford Pay Efficiency Wages?
Daniel M. G. Raff and Lawrence H. Summers
Journal of Labor Economics
Vol. 5, No. 4, Part 2: The New Economics of Personnel (Oct., 1987), pp. S57-S86 (30 pages)
Published By: The University of Chicago Press
Journal of Labor Economics
https://www.jstor.org/stable/2534911
Read Online (Free) relies on page scans, which are not currently available to screen readers. To access this article, please contact JSTOR User Support. We'll provide a PDF copy for your screen reader.

With a personal account, you can read up to 100 articles each month for free.

Get Started

Already have an account? Log in

Log in through your institution

Purchase a PDF

Purchase this article for $14.00 USD.

How does it work?

  1. Select the purchase option.
  2. Check out using a credit card or bank account with PayPal.
  3. Read your article online and download the PDF from your email or your account.

Log in through your institution

Preview
Preview
Abstract

We examine Henry Ford's introduction of the five-dollar day in 1914 in an effort to evaluate the relevance of efficiency wage theories of wage and employment determination. We conclude that the Ford experience strongly supports the relevance of these theories. Ford's decision to increase wages dramatically is most plausibly the consequence of labor problems of the kind efficiency wage theorists stress. The structure of the five-dollar day program is consistent with the predictions of efficiency wage theories. There is vivid evidence that the introduction of the five-dollar day resulted in substantial queues for Ford jobs. Significant increases in Ford productivity and profits accompanied the new regime.

Journal Information

Current issues are now on the Chicago Journals website. Read the latest issue.Since 1983, the Journal of Labor Economics (JOLE) has presented international research on issues affecting social and private behavior, and the economy. JOLE’s contributors investigate various aspects of labor economics, including supply and demand of labor services, personnel economics, distribution of income, unions and collective bargaining, applied and policy issues in labor economics, and labor markets and demographics.

Publisher Information

Since its origins in 1890 as one of the three main divisions of the University of Chicago, The University of Chicago Press has embraced as its mission the obligation to disseminate scholarship of the highest standard and to publish serious works that promote education, foster public understanding, and enrich cultural life. Today, the Journals Division publishes more than 70 journals and hardcover serials, in a wide range of academic disciplines, including the social sciences, the humanities, education, the biological and medical sciences, and the physical sciences.

Rights & Usage

This item is part of a JSTOR Collection.
For terms and use, please refer to our Terms and Conditions
Journal of Labor Economics © 1987 The University of Chicago Press