Wage gaps between farm and city: Michigan in the 1890s

In the 1890s, nominal farm wages in Michigan were only about 50% of unskilled city wages. Before we can conclude that such gaps were manifestations of labor market segmentation, they must be adjusted by the fact that in the cities living costs were higher, unemployment may have been higher, city workers may have been older, and farm laborers received perquisites. Using some Michigan Bureau of Labor surveys, we show that the 50% nominal wage gap collapses to a real earnings gap of 9 to 13%. On the basis of this evidence, much of the gaps between farm and city are an illusion. © 1991.