Proposal preview

Real Wages across the Globe: From Antiquity to the Present

Real wages are a critical measure for human well-being. Over the past 1½ decade, the study of real wages has flourished and much progress has been made in making real wages comparable over time and space. As a result, scholars have been constructing series of wages and prices in order to compute “welfare” or “subsistence” ratios for almost all parts of the globe, and from antiquity to the present. The results of these studies have shed light on important issues in global economic history by comparing living standards within Europe, as well as between Europe and Asia and analysing the development of living standards in various colonial economies. In this panel we will review the results of this research: what has the global real wage project anno 2018 taught us about long-term trends in economic growth and what explains those trends? When did incomes of the wage-earning classes converge and diverge across the globe and what factors drove these trends and how are they related to the different “Waves of Globalization”?

We invite new work on real wages in hitherto unexplored regions and/or time-periods, as well as papers concerned with the investigation of female and children’s wages: how does the inclusion of these earnings affect our view of household living standards in the past? Are there major differences between countries and world regions, and what explains this? Papers may also investigate different aspects and assumptions of the subsistence ratio methodology, or analyse different trends in real wages between different occupations, or between different regions within a country.

Organizer(s)

  • Robert C Allen NYU Abu Dhabi bob.allen@nyu.edu United Arab Emirates
  • Jan Luiten van Zanden Utrecht University j.l.vanzanden@uu.nl Netherlands
  • Pim de Zwart Wageningen University pim.dezwart@wur.nl Netherlands
  • Michail Moatsos Utrecht University m.moatsos@uu.nl Netherlands
  • Ekaterina Khaustova Arizona State University ekaterina.khaustova@asu.edu United States

Session members

  • Robert C Allen, NYU Abu Dhabi
  • Jan Luiten van Zanden, Utrecht University
  • Pim de Zwart, Wageningen University
  • Michail Moatsos, Utrecht University
  • Ekaterina Khaustova, Arizona State University
  • William Guanglin Liu, Lingnan University
  • Kaixiang Peng, Henan University
  • Dwight H. Perkins, Harvard University
  • Ernesto Lopez Losa, University of the Basque Country
  • Santiago Piquero Zarauz, University of the Basque Country
  • Cristina Victoria Radu, University of Southern Denmark
  • Sara Horrell, Cambridge University
  • Jane Humphries, Oxford University
  • Jacob Weisdorf, University of Southern Denmark
  • Jordan Claridge, London School of Economics
  • Michael Adelsberger, University of Vienna
  • Kathryn Gary, Lund University
  • Mats Olsson, Lund University
  • Corinne Boter, Utrecht University

Discussant(s)

Papers

Panel abstract

Real wages are a critical measure for human well-being. Over the past 1½ decade, the study of real wages has flourished and much progress has been made in making real wages comparable over time and space. As a result, scholars have been constructing series of wages and prices in order to compute “welfare” or “subsistence” ratios for almost all parts of the globe, and from antiquity to the present. The results of these studies have shed light on important issues in global economic history by comparing living standards within Europe, as well as between Europe and Asia and analysing the development of living standards in various colonial economies. This panel reviews the outcomes of these studies and adds to this with contributions showing newly obtained data on areas previously understudied, on women’s contributions to household income and contributions making methodological innovations.

1st half

Real wages across the globe: From antiquity to the present

Robert C. Allen, Michail Moatsos, Ekaterina Khaustova, Jan Luiten van Zanden, Pim de Zwart

Real wages are a critical measure for human well-being. Over the past 1½ decade, the study of real wages has flourished. Much progress has been made in making real wages comparable over time and space. Experts have been constructing series of wages and prices in order to compute “welfare” or “subsistence” ratios for almost all parts of the globe, from antiquity to the present. This paper presents a database that brings together the results of all these studies and analyse these: what do these patterns in wages and prices tell us about economic development in the past? When did incomes of the wage-earning classes converge and diverge and what causes underlay such trends? The paper also engages with some of the critiques that have been raised over the past years and sets an agenda for future research.

Real wages are a critical measure for human well-being. Over the past 1½ decade, the study of real wages has flourished. Much progress has been made in making real wages comparable over time and space. Experts have been constructing series of wages and prices in order to compute “welfare” or “subsistence” ratios for almost all parts of the globe, from antiquity to the present. This paper presents a database that brings together the results of all these studies and analyse these: what do these patterns in wages and prices tell us about economic development in the past? When did incomes of the wage-earning classes converge and diverge and what causes underlay such trends? The paper also engages with some of the critiques that have been raised over the past years and sets an agenda for future research.

Long-term Changes in Late Imperial China’s Real Wages and GDP Per Capita, 1000-1900: A Reexamination and Reassessment

William Guanglin Liu, Kaixiang Peng, Dwight H. Perkins

Scholars across the globe have debated on the living standard of Chinese people in comparison to Europeans before the Industrial Revolution. The debate shows a wide range of differences among scholars in measuring pre-industrial economic growth in China. Finding new quantitative evidence is extremely important to solve this problem. In this paper, we aim to give a thorough examination of the extant primary sources and provide some important real wage data that will provide new insights on long-term changes in the living standard of some areas in China from the sixteenth to the nineteenth centuries. First, we use price and wage data drawn from Ming shilu, a compilation of the administrative records by the Ming dynasty government (1368-1644). Second, we find in the preserved historical documents at Huizhou, south of the Yangtze River and close to Jiangnan, a rich collection of merchant ledgers with wages and commodity prices that covered...

Scholars across the globe have debated on the living standard of Chinese people in comparison to Europeans before the Industrial Revolution. The debate shows a wide range of differences among scholars in measuring pre-industrial economic growth in China. Finding new quantitative evidence is extremely important to solve this problem. In this paper, we aim to give a thorough examination of the extant primary sources and provide some important real wage data that will provide new insights on long-term changes in the living standard of some areas in China from the sixteenth to the nineteenth centuries. First, we use price and wage data drawn from Ming shilu, a compilation of the administrative records by the Ming dynasty government (1368-1644). Second, we find in the preserved historical documents at Huizhou, south of the Yangtze River and close to Jiangnan, a rich collection of merchant ledgers with wages and commodity prices that covered the whole period of the Qing dynasty (1644-1911).

Spanish real wages and the Little Divergence in Europe, 1500-1800

Ernesto López Losa, Santiago Piquero Zarauz

This paper contributes to the debate on the Little Divergence in real wages by suggesting an alternative approach that nuances significantly the magnitudes and the chronologies common in the literature. First, it presents a new dataset of prices and wages in Early Modern Spain. Second, we propose a new subsistence budget to deflate and compare urban unskilled wages for six Spanish cities (Barcelona, Valencia, Seville, Madrid, Valladolid, and Bilbao) and four in the North-west (London, Oxford, Amsterdam, and Antwerp) that includes brown bread prices rather than grain prices. Third, the proposal of a new subsistence budget based on bread in its cheapest forms brings new arguments to the debate. Whereas other critiques of the conventional picture of the Little Divergence have questioned the London’s wage exceptionality or the minimum caloric requirements to guarantee subsistence, we address the issue of the cost of living.

This paper contributes to the debate on the Little Divergence in real wages by suggesting an alternative approach that nuances significantly the magnitudes and the chronologies common in the literature. First, it presents a new dataset of prices and wages in Early Modern Spain. Second, we propose a new subsistence budget to deflate and compare urban unskilled wages for six Spanish cities (Barcelona, Valencia, Seville, Madrid, Valladolid, and Bilbao) and four in the North-west (London, Oxford, Amsterdam, and Antwerp) that includes brown bread prices rather than grain prices. Third, the proposal of a new subsistence budget based on bread in its cheapest forms brings new arguments to the debate. Whereas other critiques of the conventional picture of the Little Divergence have questioned the London’s wage exceptionality or the minimum caloric requirements to guarantee subsistence, we address the issue of the cost of living.

Portugal’s rise and fall, 1500-1850: a new analysis using occupational and women’s data

Nuno Palma, Jaime Reis

We now know with some level of detail the timing of Portuguese divergence from the European core. Recent research has shown good aggregate Portuguese performance until 1750 and a fast decline in the 19th century. The question remains: why did this decline happen? In this paper, we use new archival data that may shed light on this puzzle. The contribution allows three things: (1) The construction of real wages at the regional level, for 4 regions of the country: North, Centre, Lisbon’s hinterland, and South. (2) The construction of real wages for a large variety of occupations occupations (well beyond simply skilled and unskilled workers), allowing to calculate skill premia for several layers of the human capital distribution, shedding light on the incentives to accumulate literacy skills. (3) An analysis of the gender wage gap for Portugal and an analysis in international comparison.

We now know with some level of detail the timing of Portuguese divergence from the European core. Recent research has shown good aggregate Portuguese performance until 1750 and a fast decline in the 19th century. The question remains: why did this decline happen? In this paper, we use new archival data that may shed light on this puzzle. The contribution allows three things: (1) The construction of real wages at the regional level, for 4 regions of the country: North, Centre, Lisbon’s hinterland, and South. (2) The construction of real wages for a large variety of occupations occupations (well beyond simply skilled and unskilled workers), allowing to calculate skill premia for several layers of the human capital distribution, shedding light on the incentives to accumulate literacy skills. (3) An analysis of the gender wage gap for Portugal and an analysis in international comparison.

Real wages, labour conditions and standard of living in Denmark: 1500-1900

Cristina Victoria Radu

It is well established that after her take-off in the 1840s, Denmark has become one of the richest economies in the world with high living standards and high wages. But what about earlier? Interesting in this context is to bring new evidence on whether Denmark followed the traditional story of the Great Divergence within Europe. Thus, the underlying data of rural wages for men, women and children, a wide range of both casual and fulltime occupations, and across regions, give insight into the wellbeing of the Danish people during the 18th century. Skill premiums, welfare ratios, rural/urban comparison, wages of married/unmarried women are also analyzed. I find that Denmark can be placed on the relatively richer side of the Little Divergence debate by constructing a long run wage series for 1500-1900. Women received lower wages than men, but the gap tended to close towards the end of the century.

It is well established that after her take-off in the 1840s, Denmark has become one of the richest economies in the world with high living standards and high wages. But what about earlier? Interesting in this context is to bring new evidence on whether Denmark followed the traditional story of the Great Divergence within Europe. Thus, the underlying data of rural wages for men, women and children, a wide range of both casual and fulltime occupations, and across regions, give insight into the wellbeing of the Danish people during the 18th century. Skill premiums, welfare ratios, rural/urban comparison, wages of married/unmarried women are also analyzed. I find that Denmark can be placed on the relatively richer side of the Little Divergence debate by constructing a long run wage series for 1500-1900. Women received lower wages than men, but the gap tended to close towards the end of the century.

2nd half

Family standards of living in England, 1260-1850

Sara Horrell, Jane Humphries, Jacob Weisdorf

We combine recent series of male, female, and children’s’ earnings to provide a first-ever, long-run index of family income in historical England. We use the index to ask how many days an average family had to labour to achieve Allen’s ‘respectable’ and ‘bare-bone’ living standards. We also consider trends in longitudinal earnings paying particular attention to the ‘family squeeze’, i.e. stages when the ratio of dependants to earners peaked. Preliminary calculations suggest that while real annual family incomes sometimes met the ‘respectability’ benchmark, there were hard times when contributions from all family members were needed for even a barebones living. Children were often required to contribute to family incomes, particularly during the ‘family squeeze’ or when adults’ earnings were eroded. The latter conclusion draws attention to families without robust adult earners, particularly without male ‘breadwinners’, as these were especially vulnerable to fluctuations in food prices.

We combine recent series of male, female, and children’s’ earnings to provide a first-ever, long-run index of family income in historical England. We use the index to ask how many days an average family had to labour to achieve Allen’s ‘respectable’ and ‘bare-bone’ living standards. We also consider trends in longitudinal earnings paying particular attention to the ‘family squeeze’, i.e. stages when the ratio of dependants to earners peaked. Preliminary calculations suggest that while real annual family incomes sometimes met the ‘respectability’ benchmark, there were hard times when contributions from all family members were needed for even a barebones living. Children were often required to contribute to family incomes, particularly during the ‘family squeeze’ or when adults’ earnings were eroded. The latter conclusion draws attention to families without robust adult earners, particularly without male ‘breadwinners’, as these were especially vulnerable to fluctuations in food prices.

Real Wages in the Middle Ages: Working and Earning in Medieval English Agriculture

Jordan Claridge

An accurate understanding of wages is critically important for our conceptions of historic economic development, especially as existing scholarship on medieval wage rates are incompatible with the most recent estimates of historical GDP data. This paper addresses this problem by adopting a new method for determining the wage profile of workers on medieval English demesnes (the home farms of lords as against those of their tenants). It uses detailed agricultural accounts from these demesnes, which survive in tens of thousands for the period of this study (1250 – 1450). The method depends on connecting wage rates to precise data on the number of days worked by individual labourers and the prices for the goods that these same individuals needed to purchase. This approach promises to facilitate the creation of a wage series for medieval England based on historical data both over region and over time.

An accurate understanding of wages is critically important for our conceptions of historic economic development, especially as existing scholarship on medieval wage rates are incompatible with the most recent estimates of historical GDP data. This paper addresses this problem by adopting a new method for determining the wage profile of workers on medieval English demesnes (the home farms of lords as against those of their tenants). It uses detailed agricultural accounts from these demesnes, which survive in tens of thousands for the period of this study (1250 – 1450). The method depends on connecting wage rates to precise data on the number of days worked by individual labourers and the prices for the goods that these same individuals needed to purchase. This approach promises to facilitate the creation of a wage series for medieval England based on historical data both over region and over time.

Women’s and men’s income from annual and casual work and how it relates to household-level maintenance: Sweden 1500–1850

Kathryn E. Gary, Mats Olsson

The relationship between annual and casual labor in early modern European labor markets has important implications for our understanding of household income and labor allocation. Data from southern Sweden shows men working on annual contracts in unskilled occupations typically could not earn enough to support more than themselves, though it is apparent that many of these men were married and so would require more income for familial support. We construct real wage estimates for men and women 1500 to 1850 and relate them to marital status and household size in order to investigate the dynamics between casual and annual work and the household. In addition, we further explore women’s pay from annual contracts and how women’s work compared to men’s work. Were women able to support themselves in this labor regime? Did different types of women’s work have similar relationships to men’s?

The relationship between annual and casual labor in early modern European labor markets has important implications for our understanding of household income and labor allocation. Data from southern Sweden shows men working on annual contracts in unskilled occupations typically could not earn enough to support more than themselves, though it is apparent that many of these men were married and so would require more income for familial support. We construct real wage estimates for men and women 1500 to 1850 and relate them to marital status and household size in order to investigate the dynamics between casual and annual work and the household. In addition, we further explore women’s pay from annual contracts and how women’s work compared to men’s work. Were women able to support themselves in this labor regime? Did different types of women’s work have similar relationships to men’s?

Household income composition and living standards in the Netherlands, ca. 1910: Building upon Robert Allen’s welfare ratio method

Corinne Boter

The present research zooms in on the living standards of Dutch agricultural and industrial households around 1910. I use Allen’s welfare ratio method with some adjustments. First, instead of using one man’s full time wage as a proxy for household income, I also include women’s and children’s wages and the value of the yields of self-employed agriculture. These were crucial components of many Dutch households’ income, at least until the first decades of the twentieth century. Second, I increase the number of baskets one household needed based on Jane Humphries’ recalculations of the caloric requirements of men, women, and children as well as increase the size of the household. I conclude that the relative importance of men’s wages differed between agricultural and industrial households. This paper corroborates the notion that men’s wages do not accurately capture household income and suggests the importance of looking beyond men’s wages.

The present research zooms in on the living standards of Dutch agricultural and industrial households around 1910. I use Allen’s welfare ratio method with some adjustments. First, instead of using one man’s full time wage as a proxy for household income, I also include women’s and children’s wages and the value of the yields of self-employed agriculture. These were crucial components of many Dutch households’ income, at least until the first decades of the twentieth century. Second, I increase the number of baskets one household needed based on Jane Humphries’ recalculations of the caloric requirements of men, women, and children as well as increase the size of the household. I conclude that the relative importance of men’s wages differed between agricultural and industrial households. This paper corroborates the notion that men’s wages do not accurately capture household income and suggests the importance of looking beyond men’s wages.

Occupational Wage Differentials and Women’s Wages in Early Modern Vienna

Michael Adelsberger

International comparisons of real wages primarily use male wages from the building industry. To test the representativeness of these wages we need a better understanding of the local wage structure. For Vienna the largest economic enterprise, the local civic hospital (“Bürgerspital”), provides wage data for various occupations with different methods of payment. This material enables us to construct a broadened wage structure, including wages of women employed as administrative personnel as well as in the hospital’s own viniculture. By embedding these wages within the Viennese wage structure, we will gain a more precise understanding of women’s wages and on how the actual male-female wage gap developed over the course of nearly 300 years. This paper should be a first step to assess the representativeness of the building sector’s wages for Vienna as well as to understand the Viennese wage structure in general and especially with respect to women’s wages.

International comparisons of real wages primarily use male wages from the building industry. To test the representativeness of these wages we need a better understanding of the local wage structure. For Vienna the largest economic enterprise, the local civic hospital (“Bürgerspital”), provides wage data for various occupations with different methods of payment. This material enables us to construct a broadened wage structure, including wages of women employed as administrative personnel as well as in the hospital’s own viniculture. By embedding these wages within the Viennese wage structure, we will gain a more precise understanding of women’s wages and on how the actual male-female wage gap developed over the course of nearly 300 years. This paper should be a first step to assess the representativeness of the building sector’s wages for Vienna as well as to understand the Viennese wage structure in general and especially with respect to women’s wages.