Erik Hornung, Universität Köln
Strikes and the Social Contract:
Elite Response to Labor Mobilization
We study the effects of labor mobilization on the social contract. We collect novel, disaggregated data on strikes in turn of the century Prussia, a setting in which workers were disenfranchised. We find that in locations experiencing more strikes, the elite rewrote the social contract: (i) public spending shifted towards redistribution; (ii) the bourgeoisie publicly expressed support for extension of the franchise to the working class; (iii) representatives voted for franchise extension; and, (iv) representatives were elected from parties eventually supporting franchise extension. Event study and IV estimates suggest a casual effect of strikes on the social contract.