Was there an urban-rural consumption gap? The standard of living of workers in southern Sweden, 1914-1920

The aim of the paper is to qualify the meaning of an urban-rural wage gap by taking a household approach to the issue of standard of living, using household surveys for five worker groups in urban or rural Sweden in 1914/1920. The urban-rural gap in terms of total household real earnings is estimated by including all the household income and using controls for household size and composition, deflated by separate urban and rural costs-of-living indices. To further assess the results, levels of household expenditure and the nutritional value of food are compared between the worker groups. The results indicate that the urban-rural earnings gaps were small or moderate, due to the higher cost of living in urban areas and the practice of payments in kind and home production in rural areas. Some differences between urban and rural workers in terms of patterns of consumption and the nutritional value of food consumed can be attributed to differences in earnings, but a substantial part depended on the nature of the working loads, employment terms and housing conditions. These results thus modify the picture usually given in the literature on urban-rural wage gaps and income elasticity of food items.