The First Industrial Pension: Aging and Retirement in the Early 20th Century

Samuel Williamson, MeasuringWorth & Miami University
George Alter, University of Michigan

In 1900 the Pennsylvania Railroad, which was then the largest private employer in the U.S., imposed the first in the nation mandatory retirement on all its long-term employees who were age 70 or over. The Pennsylvania Railroad pension became a model for other railroads and industrial companies, but its unexpected impact on the railroad finances led to government intervention in the Railroad Retirement Acts, which created a model for the Social Security system. Using the records of 20,000 workers who retired in the first twenty years of the Pennsylvania Railroad program, we describe how its diverse workforce changed as they aged. In particular, we use data on early retirements to examine how workers responded to economic and non-economic incentives to retire. We find that workers were quite sensitive to the benefits offered by the pension, but their decisions were also shaped by working conditions, like the long hours and irregular schedules faced by those who worked aboard the trains.

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 Presented in Session 9. Labor and Technology