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Labor Productivity in Britain and America During the Nineteenth Century

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Stephen N. Broadberry
Douglas A. Irwin

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Abstract

A number of writers have recently questioned whether labor productivity or per capita incomes were ever higher in the United Kingdom than in the United States. We show that although the United States already had a substantial labor productivity lead in industry as early as 1840, especially in manufacturing, labor productivity was broadly equal in the two countries in agriculture, while the United Kingdom was ahead in services. Hence aggregate labor productivity was higher in the United Kingdom, particularly since the United States had a larger share of the labor force in low value-added agriculture. U.S. overtaking occurred decisively only during the 1890s, as labor productivity pulled ahead in services and the share of agricultural employment declined substantially. Labor force participation was lower in the United States, so that the United Kingdom's labor productivity advantage in the mid-nineteenth century translated into a larger per capita income lead.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10364.

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Date of creation: Mar 2004
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Handle: RePEc:nbr:nberwo:10364

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Find related papers by JEL classification:
N10 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - General, International, or Comparative
N30 - Economic History - - Labor and Consumers, Demography, Education, Income, and Wealth - - - General, International, or Comparative

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Marvin Towne & Wayne Rasmussen, 1960. "Farm Gross Product and Gross Investment in the Nineteenth Century," NBER Chapters, in: Trends in the American Economy in the Nineteenth Century, pages 255-316 National Bureau of Economic Research, Inc. [Downloadable!]
  2. Balke, Nathan S & Gordon, Robert J, 1989. "The Estimation of Prewar Gross National Product: Methodology and New Evidence," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 38-92, February. [Downloadable!] (restricted)
  3. Robert E. Gallman & Thomas J. Weiss, 1969. "The Service Industries in the Nineteenth Century," NBER Chapters, in: Production and Productivity in the Service Industries, pages 287-381 National Bureau of Economic Research, Inc. [Downloadable!]
  4. Douglass North, 1960. "The United States Balance of Payments, 1790-1860," NBER Chapters, in: Trends in the American Economy in the Nineteenth Century, pages 573-628 National Bureau of Economic Research, Inc. [Downloadable!]
  5. Thomas J. Weiss, 1986. "Revised Estimates of the United States Workforce, 1800-1860," NBER Chapters, in: Long-Term Factors in American Economic Growth, pages 641-676 National Bureau of Economic Research, Inc. [Downloadable!]
  6. James Field, Alexander, 1985. "On the unimportance of machinery," Explorations in Economic History, Elsevier, vol. 22(4), pages 378-401, October. [Downloadable!] (restricted)
  7. James, John A. & Skinner, Jonathan S., 1985. "The Resolution of the Labor-Scarcity Paradox," The Journal of Economic History, Cambridge University Press, vol. 45(03), pages 513-540, September. [Downloadable!]
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  8. Thomas J. Weiss, 1992. "U. S. Labor Force Estimates and Economic Growth, 1800-1860," NBER Chapters, in: American Economic Growth and Standards of Living before the Civil War, pages 19-78 National Bureau of Economic Research, Inc. [Downloadable!]
  9. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June. [Downloadable!] (restricted)
  10. Broadberry S. N., 1994. "Comparative Productivity in British and American Manufacturing during the Nineteenth Century," Explorations in Economic History, Elsevier, vol. 31(4), pages 521-548, October. [Downloadable!] (restricted)
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  11. Atkinson, Anthony B & Stiglitz, Joseph E, 1969. "A New View of Technological Change," Economic Journal, Royal Economic Society, vol. 79(315), pages 573-78, September. [Downloadable!] (restricted)
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  1. Broadberry, Stephen & Gupta, Bishnupriya, 2007. "The Historical Roots Of India’s Service-Led Development : A Sectoral Analysis Of Anglo-Indian Productivity Differences, 1870-2000," The Warwick Economics Research Paper Series (TWERPS) 817, University of Warwick, Department of Economics. [Downloadable!]
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