Working Papers

Authors: Kevin Hjortshøj O'Rourke

Dec 2018

Abstract

The paper surveys three economic history literatures that can speak to contemporary challenges to globalization: the literature on the anti-globalization backlash of the nineteenth century, focused largely on trade and migration; the literature on the Great Depression, focused largely on capital flows, the gold standard, and protectionism; and the literature on trade and warfare.

 

JEL Codes: N70, F02

Keywords: globalization, deglobalization.

Reference: 167

Individual View

Authors: Avner Offer

Aug 2018

Since the 1980s privatisation and outsourcing have been promoted on grounds of efficiency and fiscal convenience. The argument here is that the appropriate choice between business and public enterprise is determined by the interaction between two time horizons, a financial time horizon and a project time horizon. The prevailing interest rate defines a credit time horizon. Among  project appraisal methods, the payback period defines a unique temporal outer bound for private sector break-even. Net present value break-evens (and other forms of business credit) are always shorter. Any project which has a break-even longer than the payback period cannot be funded by business alone. Long-term projects encounter uncertainty and attempt to control it by means of rigid contracts, which also lead to inferior outcomes. This analysis accounts for historical patterns of enterprise. It also provides normative guidance.  Public-private partnerships for infrastructure development intended to overcome credit time boundaries. They have given rise to inefficiency and corruption and are currently in decline. It is possible to overcome the temporal boundary with a  ‘franchise’ i.e. protection from uncertainty provided by social and government agencies. This allows longer credit break-evens, but at a cost in competitive efficiency. It is also prone to corruption.  The time-horizon model undermines the standard argument for market superiority. It turns Hayek on his head: it is financial markets that require certainty, whereas social and public agencies manage in its absence.

JEL Codes: H4, H43, H44, L32, L33, L38

Reference: 165

Individual View

Authors: Robert C. Allen

Jul 2018

Abstract

Jane Humphries and Benjamin Schneider have assembled several large data bases of spinners’ production and wages that they believe disprove my view that high wages led to mechanization in eighteenth century England. This paper examines their data and shows that they have little value in understanding the incentives to mechanize. They collected thousands of observations of the earnings of women, but they do not know how many hours the spinners worked, so the data fail to establish whether their wage per hour (the relevant variable) was high or low. Another large sample of evidence concerned the production per day of spinners, but this information was mainly derived from schools and charity programs whose participants were selected because they were unproductive–so valid inferences about the productivity of women in general cannot be derived from these data. In addition, I present new evidence that substantiates my earlier
estimates of productivity and earnings. The High Wage Hypothesis is unimpaired by the critique of Humphries and Schneider.

JEL Codes: N13, N22, N63, O31

Keywords: industrial revolution, technical change, induced innovation

Reference: 166

Individual View

Authors: Douglas Hay

May 2018

Abstract

Many economic historians agree that increased labour inputs contributed to Britain’s primary industrialisation. Voluntary self-exploitation by workers to purchase new consumer goods is one common explanation, but it sits uneasily with evidence of poverty, child labour, popular protest, and criminal punishments explored by social historians. A critical and neglected legal dimension may be the evolution of contracts of employment. The law of master and servant, to use the technical term, shifted markedly between 1750 and 1850 to advantage capital and disadvantage labour. Medieval in origin, it had always been adjudicated in summary hearings before lay magistrates, and provided penal sanctions to employers (imprisonment, wage abatement, and later fines), while giving workers a summary remedy for unpaid wages. The law always enforced obedience to employers’ commands, suppressed strikes, and tried to keep wages low. Between 1750 and 1850 it became more hostile to workers through legislation and judicial redefinition; its enforcement became harsher through expansion of imprisonment, capture of the local bench by industrial employers, and employer abuse of written contracts. More work in manuscript sources is needed to test the argument, but it seems likely that intensification of labour inputs during industrialisation was closely tied to these legal changes.

Keywords: coercion, contract of employment, labour law, industriousness, punishment, work time

Reference: 164

Individual View

Authors: Sara Horrell, Jane Humphries

Mar 2018

 

 

JEL Codes: N330

Keywords: Children’s work and pay; Labour Markets; Demography; Britain, long-run

Reference: 163

Individual View

Authors: Judy Stephenson

Feb 2018

Abstract

This paper provides new information and data on how work and pay actually operated for skilled and semi-skilled men on large London construction projects in the early 1700s, and for the first time, offers detailed firm level evidence on the number of days per year worked by men. Construction workers’ working days were bounded by structural factors of both supply and demand, men worked a far lower number of days than has been assumed until now. This has implications for our understanding of the ‘industrious revolution’, and industrialisation.

JEL Codes: J3, J4, J6, N33, N63

Keywords: England; industrial revolution; industrious revolution; labour input; living standards; wages, building craftsmen

Reference: 162

Individual View

Authors: Alexander A. J. Wulfers

Jan 2018

Abstract

The Age of Mass Migration came to an end in the interwar period with new American immigration restrictions, but did this end affect some potential migrants more than others? I use previously unanalysed data from passenger lists of ships leaving Bremen, one of the major European ports of emigration, between 1920 and 1933, to identify occupations and skill levels of individual migrants. The main focus of the paper is on the role that policy played in influencing the selection of migrants. I study the American quota laws of 1921, 1924, and 1929, and find that increasingly strict quotas led to an increase in the skill level of migrants as well as a shift from agricultural to manufacturing workers first, and from manufacturing to professional workers later.

JEL Codes: J15, K37, N32, N34

Keywords: immigration policy, skill selection, quotas, United States, Bremen, interwar period

Reference: 161

Individual View

Authors: Kevin Hjortshøj O'Rourke, Alan de Bromhead, Alan Fernihough, Markus Lampe

Jan 2018

Abstract

A recent literature explores the nature and causes of the collapse in international trade during 2008 and 2009. The decline was particularly great for automobiles and industrial supplies; it occurred largely along the intensive margin; quantities fell by more than prices; and prices fell less for differentiated products. Do these stylised facts apply to trade collapses more generally? This paper uses detailed, commodity specific information on UK imports between 1929 and 1933, to see to what extent the trade collapses of the Great Depression and Great Recession resembled each other. It also compares the free trading trade collapse of 1929-31 with the protectionist collapse of 1931-3, to see to what extent protection, and gradual recovery from the Great Depression, mattered for UK trade patterns.

JEL Codes: F14, N74

Keywords: Great Depression; Great Recession; trade; protectionism

Reference: 160

Individual View

Authors: Kevin Hjortshøj O'Rourke

Sep 2017

Preliminary version of a paper prepared for IMF-BNM-IMFER Conference on Globalization in the Aftermath of the Crisis and the IMF Economic Review. The research on which this paper is based was in part funded by the European Research Council under the European Union's Seventh Framework Programme (FP7/2007-2013) / ERC grant agreement no. 249546. The paper draws on many collaborations, and I am extremely grateful to my co-authors: Miguel Almunia, Agustin Bénétrix, Roberto Bonfatti, Alan de Bromhead, Barry Eichengreen, Alan Fernihough, Ronald Findlay, William Hynes, David Jacks, Markus Lampe, Gisela Rua, and Jeffrey Williamson. The usual disclaimer applies.

Reference: 159

Individual View

Authors: Robert Allen, Ekaterina Khaustova

Aug 2017

The paper measures real wages in St Petersburg, Moscow, and Kursk between 1853 and 1937 and compares them to real wages in Boston, Manchester, Bombay, and Cairo. Russian living standards grew little between 1853 and 1913 and were like Egypt and India. Wages in the UK and USA were 2.5 - 5 times greater. Real wages in Russia almost doubled between 1913 and 1928. When seen in a Russian perspective, this looks like a big advance; when seen internationally, it is much less so. Real wages dropped to their pre-War level between 1928 and 1937 during the industrialization drive.

JEL Codes: D33, J30, N93, N94, P22, P23

Keywords: Russia, real wages, economic development, inequality, revolution

Reference: 158

Individual View

Authors: Ewout Depauw, Deborah Oxley

May 2017

Does adult stature capture conditions at birth or at some other stage in the growth cycle? Anthropometrics is lauded as a method for capturing net nutritional status over all the growing years. However, it is frequently assumed that conditions at birth were most influential. Was this true for historical populations? This paper examines the heights of Belgian men born between 1800-76 to tease apart which moments of growth were most sensitive to disruption and reflected in final heights. It exploits two proximate crises in 1846-49 and 1853-56 as shocks that permit age effects to be revealed. These are affirmed through a study of food prices and death rates. Both approaches suggest a shift of the critical moment away from the first few years of life and towards the adolescent growth spurt as the most influential on terminal stature. Furthermore, just as height is accumulated over the growing years, conditions influencing growth need to be understood cumulatively. Economic conditions at the time of birth were not explanatory, but their collective effects from ages 11 to 18 years were strongly influential. Then, both health and nutrition mattered, in shifting degrees. Teenagers, not toddlers, should be our guides to the past.

Keywords: child growth, crisis effects, early-life health, height, nutrition, prisoners, puberty

Reference: 157

Individual View

Authors: Stephen Broadberry, John Wallis

Apr 2017

Abstract

Using annual data from the thirteenth century to the present, we show that improved long run economic performance has occurred primarily through a decline in the rate and frequency of shrinking, rather than through an increase in the rate of growing. Indeed, as economic performance has improved over time, the short run rate of growing has typically declined rather than increased. Most analysis of the process of economic development has hitherto focused on increasing the rate of growing. Here, we focus on understanding the forces making for a reduction in the rate of shrinking, drawing a distinction between proximate and ultimate factors. The main proximate factors considered are (1) structural change (2) technological change (3) demographic change and (4) the changing incidence of warfare. We conclude with a consideration of institutional change as the key ultimate factor behind the reduction in shrinking.

Reference: 154

Individual View

Authors: Stephen Broadberry, Hanhui Guan, David Daokui Li

Apr 2017

Abstract

Chinese GDP per capita fluctuated at a high level during the Northern Song and Ming dynasties before trending downwards during the Qing dynasty. China led the world in living standards during the Northern Song dynasty, but had fallen behind Italy by 1300. At this stage, it is possible that parts of China were still on a par with the richest parts of Europe, but by 1750 the gap was too large to be bridged by regional variation within China and the Great Divergence had already begun before the Industrial Revolution.

JEL Codes: E100, N350, O100

Keywords: GDP Per Capita; Economic Growth; Great Divergence; China; Europe

Reference: 155

Individual View

Authors: Stephen Broadberry, Jean-Pascal Bassino, Kyoji Fukao, Bishnupriya Gupta, Masanori Takashima

Apr 2017

Abstract

Japanese GDP per capita grew at an annual rate of 0.08 per cent between 730 and 1874, but the growth was episodic, with the increase in per capita income concentrated in two
periods, 1450-1600 and after 1721, interspersed with periods of stable per capita income. There is a similarity here with the growth pattern of Britain. The first countries to achieve modern economic growth at opposite ends of Eurasia thus shared the experience of an early end to growth reversals. However, Japan started at a lower level than Britain and grew more slowly until the Meiji Restoration.

JEL Codes: N10, N30, N35, O10, O57

Keywords: Japan, Great Divergence, GDP per capita, growth reversals, Britain

Reference: 156

Individual View

Authors: Pablo Astorga Junquera

Mar 2017

Abstract

This paper discusses and documents a new dataset of real wages for unskilled, semi-skilled, and relatively skilled labour in Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela (LA-6) over the period 1900-2011. Three interrelated aspects are examined: the wage growth record associated with periods dominated by a particular development strategy; wage convergence across the LA-6; and changes in wage skill premiums and their links with fundamentals. The key findings are: i) the region’s unskilled wage rose by 147% in the period compared to rises of 243% in the average wage and 440% in income per worker (including both property and labour income); ii) there is a limited process of wage convergence across the LA-6; and weak persistence in the country hierarchy; iii) skill premiums tended to peak during the middle decades of the 20th century, coinciding with the acceleration of industrialisation and the timing of the demographic transition. Movements in the terms of trade are broadly associated with both fluctuations and trends in wage premiums, though the direction of the link is country and time specific.

JEL Codes: J31, O1, N36

Keywords: wage levels and differentials, economic development, Latin America

Reference: 153

Individual View

Authors: Kevin Hjortshøj O'Rourke, Alan de Bromhead, Alan Fernihough, Markus Lampe

Feb 2017

Abstract

International trade became much less multilateral during the 1930s. Previous studies, looking at aggregate trade flows, have argued that discriminatory trade policies had comparatively little to do with this. Using highly disaggregated information on the UK’s imports and trade policies, we find that policy can explain the majority of Britain’s shift towards Imperial imports in the 1930s. Trade policy mattered, a lot.

JEL Codes: F13, F14, N74

Keywords: trade policy, interwar period

Reference: 152

Individual View

Authors: Gregori Galofré-Vilà, Andrew Hinde, Aravinda Guntupalli

Jan 2017

Abstract

This paper uses a dataset of heights calculated from the femurs of skeletal remains to explore the development of stature in England across the last two millennia. We find that heights increased during the Roman period and then steadily fell during the ‘Dark Ages’ in the early medieval period. At the turn of the first millennium heights grew rapidly, but after 1200 they started to decline coinciding with the agricultural depression, the Great Famine and the Black Death. Then they recovered to reach a plateau which they maintained for almost 300 years, before falling on the eve of industrialisation. The data show that average heights in England in the early nineteenth century were shorter than those in Roman times, and that average heights reported between 1400 and 1700 were similar to those of the twentieth century. The paper also discusses the ssociation of heights across time with some potential determinants and correlates (real wages, inequality, food supply, climate change and expectation of life), showing that in the long run heights change with these variables, and that in certain periods, notably the thirteenth and fourteenth centuries, the associations are observable over the shorter run as well. We also examine potential biases surrounding the use of skeletal remains.

Keywords: Health, Height, England, Skeletal remains

Reference: 151

Individual View

Authors: Kevin Hjortshøj O'Rourke

Jan 2017

 

Abstract

This paper surveys independent Ireland’s economic policies and performance. It has three main messages. First, the economic history of post-independence Ireland was not particularly unusual. Very often, things that were happening in Ireland were happening elsewhere as well. Second, for a long time we were hampered by an excessive dependence on a poorly performing UK economy. And third, EC membership in 1973, and the Single Market programme of the late 1980s and early 1990s, were absolutely crucial for us. Irish independence and EU membership have complemented each other, rather than being in conflict: each was required to give full effect to the other. Irish independence would not have worked as well for us as it did without the EU; and the EU would not have worked as well for us as it did without political independence.

JEL Codes: N14, N74

Keywords: Ireland, economic history, trade policies, growth, Brexit

Reference: 150

Individual View

Authors: Avner Offer

Jan 2017

Social democracy and market liberalism offered different solutions to the same problem: how to provide for life-cycle dependency. Social democracy makes lateral transfers from producers to dependents by means of progressive taxation. Market liberalism uses financial markets to transfer financial entitlement over time. Social democracy came up against the limits of public expenditure in the 1970s. The ‘market turn’ from social democracy to market liberalism was enabled by easy credit in the 1980s. Much of this was absorbed into homeownership, which attracted majorities of households (and voters) in the developed world. Early movers did well, but easy credit eventually drove house prices beyond the reach of younger cohorts. Debt service diminished effective demand, which instigated financial instability. Both social democracy and market liberalism are in crisis.

JEL Codes: H55, E51, R21, R31

Keywords: Welfare state, housing, credit and debt

Reference: 149

Individual View

Authors: Brian A'Hearn, Alexia Delfino, Alessandro Nuvolari

Oct 2016

A swelling stream of literature employs age-heaping as an indicator of human capital, more specifically of numeracy. We re-examine this connection in light of evidence drawn from nineteenth century Italy: census data, death records, and direct, qualitative evidence on age-awareness and numeracy. Though it can stand in as an acceptable proxy for literacy, our findings suggest that age-heaping is most plausibly interpreted as a broad indicator of cultural and institutional modernisation rather than a measure of cognitive skills.

JEL Codes: N33, J24

Keywords: Age-Heaping, Numeracy, Human capital, Italy

Reference: 148

Individual View

Authors: Jane Humphries, Jacob Weisdorf

Sep 2016

Abstract:

Existing measures of historical real wages suffer from the fundamental problem that workers’ annual incomes are estimated on the basis of day wages without knowing the length of the working year. We circumvent this problem by presenting a novel wage series of male workers employed on annual contracts. We use evidence of labour market arbitrage to argue that existing real wage estimates are badly off target, because they overestimate the medieval working year but underestimate the industrial one. Our data suggests that modern economic growth began two centuries earlier than hitherto thought and was driven by an ‘Industrious Revolution’.

JEL Codes: J3, J4, J5, J6, J7, J8, N33

Keywords: England, industrial revolution, industrious revolution, labour input, living standards, wages, Malthusian model.

Reference: 147

Individual View

Authors: Robert Allen

Jul 2016

In the 1980s, Lindert and Williamson famously revised the social tables of King, Massie,

Colquhoun, Smee, and Baxter that traverse the British industrial revolution. This paper

extends their work in three directions: Servants are removed from middle and upper class

households in the tables of King, Massie, and Colquhoun and tallied separately, estimates are

made for the same tables of the number and incomes of women and children employed in the

various occupations, income estimates are broken down into rents, profits, and employment

income. These extensions to the tables allow variables to be computed that can be checked

against independent estimates as a validation exercise. The tables are retabulated in a

standard format to highlight the changing social structure of Britain during the industrial

revolution. Changes in the social structure, the evolution of incomes by classes, and the pace

of structural transformation are revealed.

Keywords: social table, industrial revolution, national income, income distribution

Reference: 146

Individual View

Authors: Brian A'Hearn, Nicola Amendola,Giovanni Vecchi

Jun 2016

Abstract:

The paper argues that household budgets are the best starting point for investigating a number of big questions related to the evolution of the living standards during the last two-three centuries. If one knows where to look, historical family budgets are more abundant than might be suspected. And statistical techniques have been developed to handle the associated problems of small, incomplete, and unrepresentative samples. We introduce the Historical Household Budgets (HHB) Project, aimed at gathering data and sources, but also at creating an informational infrastructure that provides i) reliable storage and easy access to historical family budget data, along with ii) tools to configure the data as it is entered so as to harmonise it with present-day surveys.

JEL Codes: N30, I31, I32, C81, C83, D60, D63, O12, O15

Keywords: household budgets, household budget surveys, living standards, inequality, poverty, survey, globalization, purchasing power parities,grouped data, poststratification.

Reference: 144

Individual View

Authors: Jane Humphries, Benjamin Schneider

Jun 2016

Abstract:

The prevailing explanation for why the Industrial Revolution occurred first in Britain is Robert Allen’s (2009) ‘high‐wage economy’ view, which claims that the high cost of labour relative to capital and fuel incentivized innovation and the adoption of new techniques. This paper presents new empirical evidence on hand spinning before the Industrial Revolution and demonstrates that there was no such ‘high‐wage economy’ in spinning, a leading sector of industrialization. We quantify the working lives of frequently ignored female and child spinners who were crucial to the British textile industry in the Early Modern period with evidence of productivity and wages from the late sixteenth to the early nineteenth century. Our results show that spinning was a widespread, low‐wage, low‐productivity employment, in line with the Humphries (2013) view of the motivations for the factory system.

JEL Codes: J24, J31, J42, J46, N13, N33, N63, O14, O31

Keywords: Hand spinning, Womenʹs wages, Industrial Revolution, Textiles, Great Divergence, High Wage Economy interpretation of invention and innovation

Reference: 145

Authors: Jonathon M. Clegg

Mar 2016

Abstract:

Rational retrospective voting models have dominated the literature on election forecasting and the economic vote since they were first proposed by Anthony Downs in 1957. The theory views voters as appraisers of incumbent government’s past performance, which acts as the principal source of information individuals use when making their vote. Pure retrospective voting requires far less of the electorate in order to hold a government accountable and empirical work based on this theory has been very adept at predicting election outcomes and explaining individual voting decisions. In terms of the time period assessed to form judgements on past performance however, there is a surprising disconnect between the theoretical line of thought and actual testing. The sensible assumption of retrospective voting models is that voters, looking to judge a government’s past performance, should assess changes in their own welfare over an entire term of office, with little or no discounting of past events. The majority of empirical studies however, focus on economic performance over shorter time horizons, usually within a year of an election. There have only been a handful of studies attempting to empirically test the correct temporal relationship between changes in economic indicators and election outcomes, despite its importance for retrospective voting models and democratic accountability. This working paper empirically tests over which time horizons changes in macroeconomic fundamentals continue to have a significant bearing on election outcomes in Post War Britain. It finds that longer-term measures of economic change, over entire government terms, are better at predicting changes in incumbent’s vote shares than shorter-term measures, closer to the election period. This has important consequences for future voting models and is a promising result for democratic accountability.

JEL Codes: D72, C52

Reference: 143

Individual View


Loading Papers...