INSTITUTIONAL CHANGE, COMPENSATING DIFFERENTIALS, AND ACCIDENT RISK IN AMERICAN RAILROADING, 1892-1945

The labor markets in the railroad industry went through extensive inst itutional changes between 1890 and 1945. Federal laws increased railro ad employers' liability for workplace accidents in several stages. Uni ons expanded to cover more occupations. The federal government set rai lroad wages during World War I and then mediated and arbitrated a larg e number of collective bargaining disputes between 1920 and 1945. We e xamine how these changes in institutions affected compensating differe ntials for fatal and nonfatal accident risk. The increasing role of un ionization and government intervention coincided with a decline in the size of compensating differentials.