This paper proposes and tests a theory of labor union formation and strike activity. The model and the empirical results examine the relationship between collective action and the size of worker and employer groups. Using a new county-by-industry level dataset containing the location of unions, the location of strikes, average establishment size, and the number of establishments around the turn of the twentieth century, I find that unions were more likely to form and strikes were more likely to occur in counties with intermediate-sized worker groups and large employer groups.

Why did coal mining remain so dangerous in the early twentieth century? Observers blamed miners for neglecting safety in their haste to load coal, for which they were paid on piece. Using a panel of 421 coal mines, the elasticity of fatalities with respect to speed or intensity of work is estimated to be about one-half, implying a marginal cost of a statistical life to miners of about $400 thousand in 1921 dollars. This likely exceeded their value of a statistical life, so preventing accidents was expensive for miners. However, the union reduced fatalities with little effect on work intensity.

Industrialization brought significant economic and social changes. As a response, the birth of modern industrial society came with social movements that in different ways addressed that progress, prosperity and well-being did not benefit all equally. Organizations as mutual aid societies and the labour movement gained momentum from the mid-nineteenth century onwards. The rationale for joining these organizations differed, but mutual aid societies and trade unions had in common that they both addressed risks emerging with the growth of wage work. While membership in these organizations could be was potentially overlapping, it has most often been studied in isolation. In this paper, we study the determinants of membership in trade unions and sickness insurance societies among male workers in Swedish manufacturing, circa 1900. We analyze the decision to join these organization by drawing on a cost-benefit framework factoring in risk. We use matched employer-employee data on skilled industrial workers in tobacco, printing, and mechanical engineering, and exploit variation at both firm and individual level. In general, individual characteristics did not matter much for membership. Having breadwinner responsibilities mattered for male workers’ membership in sickness insurance funds, and so did tenure but rather for contractual than economic reasons. Occupation was one of the most important factors for union membership, with small and homogenous groups in mechanical engineering and printing groups being successful in attracting members. The decisions to join trade unions and sickness insurance funds were positively associated. Memberships in the two types of organizations were to a great extent overlapping. Income was positively associated with union membership across the industries studied indicating positive selection of workers into union, but not into sickness funds for which there was no such association.

This paper analyses health data, household budgets and poor relief to provide an account on the selection, outcomes and distribution of alcohol related morbidity and accident risks in the urban working class in Sweden during the early twentieth century. Our analysis shows that health insurance societies effectively circumvented assuring alcohol related health risks. Temperance societies and teetotalers as such were not different from non-temperance/-teetotalers in terms of insurance coverage, morbidity or accidents. The costs due to alcohol were faced by the individual (alcoholics), the dependents and the poor relief. Due to substantial alcohol tax revenues however, the costs of poor relief and other alcohol related costs was covered up economically for the public sector, while the dependents faced a major external cost due to alcohol.

During the last twenty years, several writers have drawn attention to the role played by friendly societies and other mutual-aid organisations in the development of Britain’s welfare state. Proponents of mutual aid have argued that these organisations were part of the rich associational culture of working-class life; that they represented a viable alternative to state welfare; and that they were eventually undermined by it. However, this paper highlights the challenges which these organisations were already facing towards the end of the nineteenth century as a result of changes in working-class culture and the rise of more commercial insurance agencies. It suggests that the rise of state welfare was not so much a cause of these difficulties as a response to them. It also examines the role which friendly societies played in the expansion of welfare services after 1914 and their attitude to calls for further expansion before 1945.

In the beginning of the 21st century there is a debate across the world about how much welfare the state should provide and how much private savings and insurance is possible. Emphasizing budget limitations and costs, it is to a large extent a debate about finance and efficiency rather than about the function of welfare in society. In the early period of industrial capitalism, however, when almost all social problems were left to private initiative, the fragile legitimacy of the social order posed a political challenge. In response to a crisis of legitimacy in 1830, capitalists in the Rhineland, at that time the economically most advanced region in Prussia, collectively addressed social problems created by industry and, for example, suggested collective labor agreements regulating wages and work time. Their proposal did not gain support from the Prussian government that argued collective agreements would violate freedom of contracting. Three decades later, the same group of capitalists suggested minimum wages and joint arbitration panels of employers and elected labor representatives. More than 20 years before Bismarck, they also proposed a mandatory pension system with equal contributions of employers and employees. The industrialists aimed at stabilizing the social environment by reconciling labor with the existing capitalist order. Today everybody knows that they did not succeed. But the observation of capitalists demanding public welfare and the Prussian state defending liberal capitalism is slightly ad odds with the dominant perception of the Bismarckian welfare state being a strategy of social and political pacification of the working class in the process of nation-state building. The industrialists’ proposals and arguments, however, and the time at which they articulated them, support a Polanyian view in which the need for social policy appears as a by-product of capitalism. Analyzing social policy as an aim of capitalists, the paper brings a new perspective to the debate about the origins of the welfare state.

There is a literature on incomplete take-up of modern social programs. This literature identifies a number of reasons for incomplete take-up, which can be divided in three broad categories – information, cost of application (relative to reward), and stigma – and typically finds a role for all three. This paper will analyze take-up of the first large-scale benefits program in the U.S., the Union Army Pension, focusing on the behavior of Union Army widows. Using microdata on the widows of Union Army veterans, I identify correlates of the above theoretical determinants of take-up, and characterize their impact on widows’ decisions about whether and when to apply for pensions. This offers some unique insight into the history of Americans’ relationship with social assistance. In particular, this work sheds light on process by which knowledge and uptake of a benefits program spreads in the absence of widespread familiarity with such programs. A specific advantage of the database and institutional setting I use in this paper is that it enables cleaner identification of the determinants of the take-up decision. The Civil War Pension was first introduced in 1862, and many widows applied shortly thereafter. In 1866, an amendment to the law was passed, granting women a supplement to the original pension, which was tied to the number of minor children she had. However, women had to apply for the supplement; it was not granted automatically. As such, I am able to observe multiple take-up decisions by the same woman, allowing me to control for unobservable characteristics of the individual that may influence these decisions.

During the 20th century the national government seems to have been less discriminatory than southern states and local governments in many ways. Therefore, we might expect that New Deal federal government programs were likely to provide more equal access for blacks and whites than the earlier state and local relief groups. The Federal Works Agency (1940, p. 23), for example, argued that its programs—including the Public Works Administration, the Works Projects Administration, the Public Roads Administration, and the Public Buildings Administration—actively sought to ensure no racial discrimination in employment and in the distribution of benefits. Although the federal government may have attempted to create equal access to these programs based on race or socioeconomic status, its oversight was limited because nearly all of the programs were administered in conjunction with state and local authorities in some way. We analyze the differences in black and white access to New Deal programs using evidence from the Federal Emergency Relief Administration in October 1933, the Works Progress Administration in 1937, as well as individual data for the WPA in 1940.