Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Colonial Origins of the Divergence in the Americas: A Labour Market Approach

Contents:

Author Info

  • Robert C. Allen
  • Tommy E. Murphy
  • Eric B. Schneider

Abstract

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 estimations of price indexes for Boston, Philadelphia, and the Chesapeake Bay region in North America and Bogotá, Mexico, and Potosí in Latin America exploring alternative assumptions 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 find that real wages were higher in North America than in Latin America from the very early colonial period: four times the World Bank Poverty Line (WBPL) in North America while only two times the WBPL in Latin America. These wages place the North American colonies among the most advanced countries in the world alongside Northwestern European countries and the Latin American colonies among the least developed countries at a similar level to Southern European and Asian countries. These wage differences existed from the early colonial period because wages in the American colonies were determined by wages in the respective metropoles and by the Malthusian population dynamics of indigenous peoples. Settlers would not migrate unless they could maintain their standard of living, so wages in the colonies were set in the metropole. Political institutions, forced labour regimes, economic geography, disease environments and culture shaped the size of the economy of each colony but did not affect income levels.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: ftp://ftp.igier.unibocconi.it/wp/2011/402.pdf
Download Restriction: no

Bibliographic Info

Paper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 402.

as in new window
Length:
Date of creation: 2011
Date of revision:
Handle: RePEc:igi:igierp:402

Contact details of provider:
Postal: via Rontgen, 1 - 20136 Milano (Italy)
Phone: 0039-02-58363301
Fax: 0039-02-58363302
Web page: http://www.igier.unibocconi.it/

Order Information:
Email:
Web: http://www.igier.unibocconi.it/en/papers/index.htm

Related research

Keywords:

Other versions of this item:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Peter H. Lindert & Jeffrey G. Williamson, 2014. "American Colonial Incomes, 1650-1774," NBER Working Papers 19861, National Bureau of Economic Research, Inc.
  2. Julio Martínez-Galarraga & Marc Prat, 2014. "Wages and prices in early Catalan industrialisation," UB Economics Working Papers 2014/305, Universitat de Barcelona, Facultat d'Economia i Empresa, UB Economics.
  3. Robert Allen, 2013. "The High wage Economy and the Industrial Revolution: A Restatement," Economics Series Working Papers, University of Oxford, Department of Economics Number 115, University of Oxford, Department of Economics.
  4. Leonor Freire Costa & Nuno Palma & Jaime Reis, 2013. "The great escape? The contribution of the empire to Portugal’s economic growth, 1500-1800," Working Papers in Economic History wp13-07, Universidad Carlos III, Departamento de Historia Económica e Instituciones.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:igi:igierp:402. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.