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Institutions, Wages and Inequality : The Case of Europe and its Periphery (1500-1899)

  • Davin Chor

    (SMU)

This paper explores the long-run relationship between institutions and wage outcomes in Europe and its periphery. I find that cities that exercised stronger institutional protection of private property experienced : (i) higher levels of both skilled and unskilled real wages, as well as (ii) lower levels of inequality as measured by the skilled-unskilled wage ratio. While the first result corroborates existing work on the positive growth effects of better institutions, the second finding is more novel to the literature. Some explanations are proposed for how stronger institutions can cause an increase in the relative supply of skilled workers, thus lowering wage inequality.

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File URL: http://saber.eaber.org/node/22065
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Paper provided by East Asian Bureau of Economic Research in its series Microeconomics Working Papers with number 22065.

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Date of creation: Jan 2005
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Handle: RePEc:eab:microe:22065
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  1. van Zanden, Jan L., 1999. "Wages and the standard of living in Europe, 1500 1800," European Review of Economic History, Cambridge University Press, vol. 3(02), pages 175-197, August.
  2. zmucur, S leyman & Pamuk, Sevket, 2002. "Real Wages And Standards Of Living In The Ottoman Empire, 1489 1914," The Journal of Economic History, Cambridge University Press, vol. 62(02), pages 293-321, June.
  3. Stanley L. Engerman & Kenneth Lee Sokoloff, 2002. "Factor Endowments, Inequality, and Paths of Development Among New World Economies," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2002), pages 41-110, August.
  4. Jeffrey G. Williamson, 1992. "The Evolution of Global Labor Markets Since 1830 Background Evidence and Hypotheses," NBER Historical Working Papers 0036, National Bureau of Economic Research, Inc.
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  7. Daron Acemoglu & Simon Johnson & James Robinson, 2005. "The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth," American Economic Review, American Economic Association, vol. 95(3), pages 546-579, June.
  8. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
  9. Chor, Davin, 2005. "Institutions, wages, and inequality: The case of Europe and its periphery (1500-1899)," Explorations in Economic History, Elsevier, vol. 42(4), pages 547-566, October.
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  12. Clark, Gregory, 2002. "Land rental values and the agrarian economy: England and Wales, 1500 1914," European Review of Economic History, Cambridge University Press, vol. 6(03), pages 281-308, December.
  13. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  14. Alesina, Alberto F & Rodrik, Dani, 1991. "Distributive Politics and Economic Growth," CEPR Discussion Papers 565, C.E.P.R. Discussion Papers.
  15. Edward L. Glaeser & Jose Scheinkman & Andrei Shleifer, 2002. "The Injustice of Inequality," Harvard Institute of Economic Research Working Papers 1967, Harvard - Institute of Economic Research.
  16. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
  17. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
  18. Banerjee, Abhijit V & Duflo, Esther, 2003. "Inequality and Growth: What Can the Data Say?," Journal of Economic Growth, Springer, vol. 8(3), pages 267-99, September.
  19. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, 09.
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