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Considering the counterfactual: Real wages in the First Industrial Revolution

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  • Crafts, Nicholas

    (University of Sussex)

  • Mills, Terence C.

    (Loughborough University)

Abstract

We investigate a structural model of demographic-economic interactions for England during 1570 to 1850. We estimate that the annual rate of population growth consistent with constant real wages was 0.4 per cent before 1760 but 1.5 per cent thereafter. We find that exogenous shocks increased population growth dramatically in the early decades of the Industrial Revolution. Simulations of our model show that if these demographic shocks had occurred before the Industrial Revolution the impact on real wages would have been catastrophic and that these shocks were largely responsible for very slow growth of real wages during the Industrial Revolution.

Suggested Citation

  • Crafts, Nicholas & Mills, Terence C., 2020. "Considering the counterfactual: Real wages in the First Industrial Revolution," CAGE Online Working Paper Series 502, Competitive Advantage in the Global Economy (CAGE).
    • Handle: RePEc:cge:wacage:502
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    Keywords

    epidemic disease; Industrial Revolution; Malthusian checks; nuptiality; population growth; real wages; technological progress. JEL Classification: N13; N33;
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