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Australian Squatters, Convicts, and Capitalists: Dividing Up a Fast-Growing Frontier Pie 1821-1871

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  • Laura Panza
  • Jeffrey G. Williamson

Abstract

Compared with its nineteenth century competitors, Australian GDP per worker grew exceptionally fast, about twice that of the US and three times that of Britain. This paper asks whether the fast growth performance produced rising inequality. Using a novel data set we offer new evidence supporting unambiguously the view that, in sharp contrast with US, Australia underwent a revolutionary leveling in incomes between the 1820s and the 1870s. This assessment is based on our annual estimates of functional shares in the form of land rents, convict incomes, free unskilled incomes, free skill premiums, British imperial transfers and a capitalist residual.

Suggested Citation

  • Laura Panza & Jeffrey G. Williamson, 2017. "Australian Squatters, Convicts, and Capitalists: Dividing Up a Fast-Growing Frontier Pie 1821-1871," CEH Discussion Papers 02, Centre for Economic History, Research School of Economics, Australian National University.
    • Handle: RePEc:auu:hpaper:053
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    File URL: https://cbe.anu.edu.au/researchpapers/CEH/WP201702.pdf
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    References listed on IDEAS

    as
    1. Williamson, Jeffrey G. & Panza, Laura, 2017. "Australian Exceptionalism? Inequality and Living Standards 1821-1871," CEPR Discussion Papers 11756, C.E.P.R. Discussion Papers.
    2. Lewis, W Arthur, 1980. "The Slowing Down of the Engine of Growth," American Economic Review, American Economic Association, vol. 70(4), pages 555-564, September.
    3. Sambit Bhattacharyya & Jeffrey G. Williamson, 2011. "Commodity Price Shocks And The Australian Economy Since Federation," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 51(2), pages 150-177, July.
    4. Ville,Simon & Withers,Glenn (ed.), 2015. "The Cambridge Economic History of Australia," Cambridge Books, Cambridge University Press, number 9781107029491, September.
    5. A. B Atkinson & Andrew Leigh, 2013. "The Distribution of Top Incomes in Five Anglo-Saxon Countries Over the Long Run," The Economic Record, The Economic Society of Australia, vol. 89, pages 31-47, June.
    6. Peter H. Lindert & Jeffrey G. Williamson, 2016. "Unequal Gains: American Growth and Inequality since 1700," Economics Books, Princeton University Press, edition 1, number 10670.
    7. Williamson, Jeffrey G., 2008. "Globalization and the Great Divergence: terms of trade booms, volatility and the poor periphery, 1782–1913," European Review of Economic History, Cambridge University Press, vol. 12(3), pages 355-391, December.
    8. Jeffrey G. Williamson, 2008. "Globalization and the Great Divergence: Terms of Trade Booms and Volatility in the Poor Periphery 1782-1913," NBER Working Papers 13841, National Bureau of Economic Research, Inc.
    9. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    10. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Globalization in Historical Perspective," NBER Books, National Bureau of Economic Research, Inc, number bord03-1.
    11. Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    12. Obstfeld,Maurice & Taylor,Alan M., 2005. "Global Capital Markets," Cambridge Books, Cambridge University Press, number 9780521671798, September.
    13. Sambit Bhattacharyya & Jeffrey G. Williamson, 2016. "Distributional Consequences of Commodity Price Shocks: Australia Over A Century," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(2), pages 223-244, June.
    14. Richard Sylla & Jack Wilson & Robert Wright, 2006. "Integration of Trans-Atlantic Capital Markets, 1790-1845," Review of Finance, European Finance Association, vol. 10(4), pages 613-644, December.
    15. Williamson, Jeffrey G., 2011. "Trade and Poverty: When the Third World Fell Behind," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262015158, April.
    16. Jeffrey G. Williamson, 2011. "Trade and Poverty: When the Third World Fell Behind," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262015153, April.
    17. Jeffrey G. Williamson, 2012. "Commodity Prices over Two Centuries: Trends, Volatility, and Impact," Annual Review of Resource Economics, Annual Reviews, vol. 4(1), pages 185-206, August.
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    Cited by:

    1. Laura Panza & Jeffrey G. Williamson, 2019. "Always Egalitarian? Australian Earnings Inequality c1870," CEH Discussion Papers 01, Centre for Economic History, Research School of Economics, Australian National University.
    2. Laura Panza & Jeffrey G. Williamson, 2021. "Always egalitarian? Australian earnings inequality 1870–1910," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 61(2), pages 228-246, July.

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    More about this item

    Keywords

    Colonial Australia; inequality; growth; functional distribution;
    All these keywords.

    JEL classification:

    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • N37 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Africa; Oceania
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O56 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Oceania

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