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Between conquest and independence: Real wages and demographic change in Spanish America, 1530–1820

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  • Arroyo Abad, Leticia
  • Davies, Elwyn
  • van Zanden, Jan Luiten

Abstract

On the basis of a newly constructed dataset, this paper presents long-term series of the price levels, nominal wages, and real wages in Spanish Latin America – more specifically in Mexico, Peru, Bolivia, Colombia, Chile, and Argentina – between ca. 1530 and ca. 1820. It synthesizes the work of scholars who have collected and published data on individual cities and periods, and presents comparable indices of real wages and prices in the colonial period that give a reasonable guide to trends in the long run. We show that nominal wages and prices were on average much higher than in Western Europe or in Asia, a reflection of the low value of silver that must have had consequences for competitiveness of the Latin American economies. Labour scarcity was the second salient feature of Spanish Latin America and resulted in real wages much above subsistence and in some cases (Mexico, Bolivia, Argentina) comparable to levels in Northwestern Europe. For Mexico, this was caused by the dramatic decline of the population after the Conquest. For Bolivia, the driving force was the boom in silver mining in Potosi that created a huge demand for labour. In the case of Argentina, low population density was a pre-colonial feature. Perhaps due to a different pattern of depopulation, the real wages of other regions (Peru, Colombia and Chile) were much lower, and only increased above subsistence during the first half of the 18th century. These results are consistent with independent evidence on biological standards of living and with estimates of GDP per capita at the beginning of the 19th century.

Suggested Citation

  • Arroyo Abad, Leticia & Davies, Elwyn & van Zanden, Jan Luiten, 2012. "Between conquest and independence: Real wages and demographic change in Spanish America, 1530–1820," Explorations in Economic History, Elsevier, vol. 49(2), pages 149-166.
  • Handle: RePEc:eee:exehis:v:49:y:2012:i:2:p:149-166
    DOI: 10.1016/j.eeh.2011.12.001
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    References listed on IDEAS

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    Cited by:

    1. Allen, Robert C., 2014. "American Exceptionalism as a Problem in Global History," The Journal of Economic History, Cambridge University Press, vol. 74(02), pages 309-350, June.
    2. repec:eee:ehbiol:v:29:y:2018:i:c:p:168-178 is not listed on IDEAS
    3. Inklaar, Robert & de Jong, Harmen & Bolt, Jutta & van Zanden, Jan, 2018. "Rebasing 'Maddison': new income comparisons and the shape of long-run economic development," GGDC Research Memorandum GD-174, Groningen Growth and Development Centre, University of Groningen.
    4. Laura Panza & Jeffrey G. Williamson, 2017. "Australian Exceptionalism? Inequality and Living Standards 1821-1871," Department of Economics - Working Papers Series 2027, The University of Melbourne.
    5. Ernesto López Losa & Santiago Piquero Zarauz, 2016. "Spanish real wages in the Northern-Western European mirror, 1500-1800. On the timings and magnitude of the Little Divergence in Europe," Documentos de Trabajo (DT-AEHE) 1607, Asociacion Espa–ola de Historia Economica.
    6. Leonardo Ridolfi, 2017. "L'histoire immobile? Six centuries of real wages in France from Louis IX to Napoleon III: 1250-1860," LEM Papers Series 2017/14, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    7. Federico, Giovanni & Tena Junguito, Antonio, 2017. "Exports and American divergence. Lost decades and Emancipation collapse in Latin American and the Caribbean 1820-1870," IFCS - Working Papers in Economic History.WH 24208, Universidad Carlos III de Madrid. Instituto Figuerola.
    8. John Scott & Enrique de la Rosa & Rodrigo Aranda, 2017. "Inequality and fiscal redistribution in Mexico: 1992–2015," WIDER Working Paper Series 194, World Institute for Development Economic Research (UNU-WIDER).
    9. Trevor Burnard & Laura Panza & Jeffrey G. Williamson, 2017. "The Social Implications of Sugar: Living Costs, Real Incomes and Inequality in Jamaica c1774," NBER Working Papers 23897, National Bureau of Economic Research, Inc.
    10. Robert Allen & Ekaterina Khaustova, 2017. "Russian Real Wages Before and After 1917: in Global Perspective," Oxford University Economic and Social History Series _158, University of Oxford, Department of Economics.
    11. Javier L. Arnaut, 2017. "Was Colonialism Fiscally Sustainable? An Empirical Examination of the Colonial Finances of Spanish America," Documentos de Trabajo (DT-AEHE) 1703, Asociacion Espa–ola de Historia Economica.
    12. Andrés Calderón-Fernández & Héctor García-Montero & Enrique Llopis-Agelán, 2017. "New research guidelines for living standards, consumer baskets, and prices in Madrid and Mexico," Working Papers 097, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.
    13. John Scott & Enrique de la Rosa & Rodrigo Aranda, 2017. "Inequality and Fiscal Redistribution in Mexico," Commitment to Equity (CEQ) Working Paper Series 65, Tulane University, Department of Economics.
    14. repec:eee:ehbiol:v:26:y:2017:i:c:p:126-136 is not listed on IDEAS
    15. Peter H. Lindert, 2016. "Purchasing Power Disparity before 1914," NBER Working Papers 22896, National Bureau of Economic Research, Inc.
    16. Robert C. Allen & Ekaterina Khaustova, 2017. "Russian Real Wages Before and After 1917: in Global Perspective," Working Papers 20170003, New York University Abu Dhabi, Department of Social Science, revised May 2017.
    17. Ho, Chi Pui, 2016. "GeoPopulation-Institution Hypothesis: Reconciling American Development Process and Reversal of Fortune within a Unified Growth Framework," MPRA Paper 73863, University Library of Munich, Germany.

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