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The First East Asian Economic Miracle: Wages, Living Standards and Foundations of Modern Economic Growth in Southeast Asia, 1880-1938

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  • Jean-Pascal Bassino
  • Pierre van der Eng

Abstract

This paper presents new estimates of the living standards of unskilled and skilled wage earners in Southeast Asia. It estimates welfare ratios in nine Asian cities (Bangkok, Hanoi, Jakarta, Penang, Rangoon, Saigon, Singapore, Surabaya and Tokyo) during 1880-1938 and compares them to those in two European cities (Milan and Paris). It finds that the welfare ratios in most Southeast Asian cities were close to or above the Italian and Japanese levels. By the 1930s those in Bangkok were even close to Paris. It also finds a wage premium for skilled labour that was higher than in Europe and Japan. These findings suggest that there was a sustained strong demand for skilled workers, as well as savings potentials and opportunities for the development of markets beyond basic commodities in these Asian cities. These findings are consistent with recent research into economic growth and living standards in pre-war East Asia. The paper synthesises these findings to argue that some of the foundations of modern economic growth, and therefore the second East Asian Economic Miracle since the mid-1960s, were being established before World War II. But it took most countries in Southeast Asia until the 1960s and after to draw the full benefits from these preconditions when their processes of modern economic growth accelerated.

Suggested Citation

  • Jean-Pascal Bassino & Pierre van der Eng, 2021. "The First East Asian Economic Miracle: Wages, Living Standards and Foundations of Modern Economic Growth in Southeast Asia, 1880-1938," CEH Discussion Papers 05, Centre for Economic History, Research School of Economics, Australian National University.
  • Handle: RePEc:auu:hpaper:098
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    File URL: https://cbe.anu.edu.au/researchpapers/CEH/WP202105.pdf
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    References listed on IDEAS

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    1. Chandra, Siddharth, 2002. "Race, Inequality, and Anti-Chinese Violence in the Netherlands Indies," Explorations in Economic History, Elsevier, vol. 39(1), pages 88-112, January.
    2. Myung Soo Cha, 2015. "Unskilled wage gaps within the Japanese Empire," Economic History Review, Economic History Society, vol. 68(1), pages 23-47, February.
    3. Marks, Daan, 2010. "Unity or diversity? On the integration and efficiency of rice markets in Indonesia, c. 1920-2006," Explorations in Economic History, Elsevier, vol. 47(3), pages 310-324, July.
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    More about this item

    Keywords

    East Asian Economic Miracle; welfare; wages; Southeast Asia;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East

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