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Slow Real Wage Growth during the Industrial Revolution: Productivity Paradox or Pro-Rich Growth?

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  • Crafts, Nicholas

    (University of Warwick & University of Sussex)

Abstract

I examine the implications of technological change for productivity, real wages and factor shares during the industrial revolution using recently available data. This shows that real GDP per worker grew faster than real consumption earnings but labour’s share of national income changed little as real product wages grew at a similar rate to labour productivity in the medium term. The period saw modest TFP growth which limited the growth both of real wages and of labour productivity. Economists looking for an historical example of rapid labour-saving technological progress having a seriously adverse impact on labour’s share must look elsewhere.

Suggested Citation

  • Crafts, Nicholas, 2020. "Slow Real Wage Growth during the Industrial Revolution: Productivity Paradox or Pro-Rich Growth?," The Warwick Economics Research Paper Series (TWERPS) 1268, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1268
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    Cited by:

    1. Heblich, Stephan & Redding, Stephen J. & Voth, Hans-Joachim, 2022. "Slavery and the British Industrial Revolution," LSE Research Online Documents on Economics 118034, London School of Economics and Political Science, LSE Library.
    2. Giovanni Federico & Alessandro Nuvolari & Michelangelo Vasta, 2023. "Inequality in Pre‐Industrial Europe (1260–1850): New Evidence From the Labor Share," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(2), pages 347-375, June.
    3. Nicholas Crafts, 2021. "Understanding productivity growth in the industrial revolution," Economic History Review, Economic History Society, vol. 74(2), pages 309-338, May.

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    More about this item

    Keywords

    Engels’ pause ; factor shares ; industrial revolution ; labour productivity ; real wages JEL codes: N13 ; O33 ; O47;
    All these keywords.

    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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