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The timing and pattern of real wage divergence in pre‐industrial Europe: evidence from Germany, c. 1500–1850
Author(s) -
Pfister Ulrich
Publication year - 2017
Publication title -
the economic history review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.014
H-Index - 49
eISSN - 1468-0289
pISSN - 0013-0117
DOI - 10.1111/ehr.12419
Subject(s) - wage , real wages , industrialisation , quarter (canadian coin) , great divergence , divergence (linguistics) , wage growth , economics , economy , industrial revolution , index (typography) , geography , labour economics , economic history , china , market economy , archaeology , linguistics , philosophy , world wide web , computer science
This study uses price information relating to 12 towns and wage information from 18 towns to develop a real wage index for unskilled urban labourers in Germany during the three‐and‐a‐half centuries preceding the onset of rapid industrialization. Combining the new series with information from other parts of Europe establishes two stages of real wage divergence during the seventeenth to nineteenth century. The first occurred in the middle of the seventeenth century when real wages in centres of trade and finance located on the rim of the North Sea rose far above the level prevailing in their hinterland. The second stage unfolded from the second quarter of the eighteenth century when the real wage in south England, northern and central Italy, and Germany began to diverge; Germany followed a middle path between the other two countries. The second commercial revolution, which improved business techniques and promoted Smithian growth, goes a long way towards accounting for this development.