Lecture notes
Notes for industrialisation (EC104 topic 4)
- Module
- EC104. World Economy
- Institution
- The University Of Warwick (UoW)
Lecture and seminar notes from EC104 topic 4
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Industrialisation and living standardsThe standards of living debate - wages
Standards of living
The pessimists’ view
● On average, income pc rose but the SoL of workers declined during the IR
● Engels (1844), Mill (1848), Feinstein (1998) and Allen (2007)
The optimists’ view
● Some workers suffered but conditions improved for most
● Ashtin (1949), Hartwell (1959), Clark (2005), Lindert and Williamson (1983)
The evolution of real wages
● Can estimate real wages by deflating nominal wages (using occupation) with
the cost of living
● Lindert and Williamson (1983) used data on London artisans and building
labourers to create wages for adult males
○ Found all nominal wages increased, but some more than others
○ Need to also consider the cost of living
○ L&W argue that real wages only started increasing post 1810
○ SoL increased for all workers, but inequality also increased
● L&W - there was variability and stagnation in the 18th c and a real wage boom
in the early 19th c
○ Real wages nearly 2x from the 18th to 19th c
○ All workers were better off by the 19th c
● L&W confirm the optimist’s view - high net wage gain
○ Created an incentive for urban manufacturing over rural farming -
workers migrated to cities
● Feinstein (1998) included the missing labour force sectors, earnings of
women / kids and included all payments
○ Used a more comprehensive basket and a larger sample for rent with
weights varying over time
● F showed nominal wage gains being eroded by rising prices until 1810 but
after 1810 there were less dramatic price changes compared to L&W
○ Much slower decline in prices so real wages were not as different
● Clark (2001 and 2005) saw prices decline more than Feinstein but less than
L&W
○ New sources for English craftsmen and farm workers
○ Does not equally weight rural and urban weights and uses consistent
quality data
○ Shows real wages for labourers rapidly grew in the 19th c
● Allen (2007) tried to replicate Feinstein and Clark’s findings
, ○ After blending their work, his results were much closer to Feinstein’s
○ Real wages rose slowly during the early IR
○ SoL worsen if we consider unemployment, dependents and urban
disamenities
■ They reduce real wages by 3%, 10% and 8%
○ Real wages grew much slower than output per worker - causing rising
inequality
Anthropometrics and Child Labour
Need to consider more than wages:
● Real wage debate is not conclusive
● Real wages cannot consider alternative measures
Anthropometric measures are measures of the human body
● Can partly reveal conditions at birth
● Height is a good proxy for SoL
○ Shows nutrition at an early age
○ Countries with a higher GDP per capita have taller citizens
○ Consider men and women separately
Historical evidence on heights
Floud, Wachter and Gregory (1990)
● Used data on men admitted to the marines (1770-1806) and the Royal Navy
Military Academy (post 1806)
● Heights rose for those born in the late 18th c / early 19th c but fell in the late
19th c
Nicholas and Oxley (1993)
● Looked at heights of convicts transported to Australia
● Looked at male / female comparison and rural / urban comparison
○ Used Irish convicts as a control as industrialisation had not occurred
● Heights were lower in urban than rural (not for Irish)
● English heights fall over the IR
○ Larger fall for rural (enclosure?)
Cinnirella (2008)
● Downward trend in heights throughout the IR after revisiting FWG data
● Cohorts born in the IR were shorter than those born before
In the SR, we do not see the gains of the IR but in the LR there are clear gains of the
IR (transport, tech…)
Criticisms
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