The colonial origins of divergence in the Americas: a labour market approach

"Part of a long-run project to put together a systematic database of prices and wages for the American continents, this paper takes a first look at standards of living in a series of North American and Latin American cities. From secondary sources we collected price data that –with diverse degrees of quality– covers various years between colonization and independence, and, following the methodology now familiar in the literature, we built es- timations of price indexes for Bogota, Mexico, and Potosi exploring alternative assump- tions on the characteristics of the reference basket. We use these indexes to deflate the (relatively more scarce) figures on wages, and compare the results with each other, and with the now widely known series for various European and Asian cities. We also present some new series for two North American cities, Philadelphia and Boston, that allow us to study the different patterns of development of Anglo-Saxon and Hispanic America. In this way, we contribute to the growing discussion on standards of living in the long-run, pro- posing a first benchmark for the international comparison of North American and Latin American series in the colonial period, and discuss a series of hypotheses related to the dynamics of the labour market that could explain the patterns we find."