Daniel MacDonald, UMass Amherst graduate student, is the winner of the Horvat-Vanek Prize for his paper, “Understanding the Sources of Productivity Growth During Industrialization: An Empirical Investigation of the Dynamic Properties of Piece Rate Contracts.” The prize is awarded every two years for a research paper of exceptional quality written by a young scholar in one of the areas of interest to International Association for the Economics of Participation (IAFEP).
MacDonald’s paper uses data from a Massachusetts textile mill covering the period from 1834-1855 to better understand the economic history of industrialization. He argues that we must see this period’s strong labor productivity growth within the context of changing social relations at the mill. In the 1830s workers (who were mostly women from the rural New England countryside) often protested by reducing their effort when managers cut their piece rate. By the mid- to late-1840s, however, the women workers were more likely respond to wage reductions by increasing effort (and respond to wage increases by reducing effort). This surprising finding is, he argues, a sign of the transition to a wage-dependent workforce. This hypothesis is supported by statistical analysis as well as an analysis of the social history of industrialization.