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Between Malthus and the industrial take-off: regional inequality in Sweden, 1571-1850

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  • Enflo, Kerstin

    () (Department of Economic History, Lund University)

  • Missiaia, Anna

    () (Department of Economic History, Lund University)

Abstract

The causes and extent of regional inequality in the process of economic growth are at the core of historical economic research. So far, much attention has been devoted to studying the role of industrialization in driving regional divergence. But empirical studies on relatively unequal countries such as Italy or Spain show that inequality was already high when their modern industrialization began (Felice, 2011; Rosés et al., 2010). This paper studies the extent and drivers of pre-industrial inequality for the first time with reference to a pre-industrial European economy. Using new estimates of regional GDP for the regions of Sweden for the period 1571-1850 (Enflo and Missiaia, 2017), we find that regional inequality increased dramatically between 1571 and 1750 and stayed high until the mid-19th century. This result discards the view that industrial take-off was the main driver of regional divergence. Decomposing the Theil index for GDP per worker, we find that the bulk of inequality from 1750 onwards was driven by structural differences across sectors rather than different regional productivity within sectors. We then show that counties with higher agricultural productivity followed a classic Malthusian pattern in its population dynamics when experiencing technological advancement, while ones with higher industrial productivity did not. The difference in the two sectors is what boosted pre-industrial regional inequality. We suggest that institutional factors such as the creation of the Swedish Empire, the monopoly trading rights for Stockholm and the protective industrial policy explain this exceptional pattern.

Suggested Citation

  • Enflo, Kerstin & Missiaia, Anna, 2017. "Between Malthus and the industrial take-off: regional inequality in Sweden, 1571-1850," Lund Papers in Economic History 168, Lund University, Department of Economic History.
  • Handle: RePEc:hhs:luekhi:0168
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    References listed on IDEAS

    as
    1. Kerstin Enflo & Joan Ramón Rosés, 2015. "Coping with regional inequality in Sweden: structural change, migrations, and policy, 1860–2000," Economic History Review, Economic History Society, vol. 68(1), pages 191-217, February.
    2. Quamrul Ashraf & Oded Galor, 2011. "Dynamics and Stagnation in the Malthusian Epoch," American Economic Review, American Economic Association, vol. 101(5), pages 2003-2041, August.
    3. Roger Fouquet & Stephen Broadberry, 2015. "Seven Centuries of European Economic Growth and Decline," Journal of Economic Perspectives, American Economic Association, vol. 29(4), pages 227-244, Fall.
    4. Lennart Schon & Olle Krantz, 2012. "The Swedish economy in the early modern period: constructing historical national accounts," European Review of Economic History, Oxford University Press, vol. 16(4), pages 529-549, November.
    5. Enflo, Kerstin & Lundh, Christer & Prado, Svante, 2014. "The role of migration in regional wage convergence: Evidence from Sweden 1860–1940," Explorations in Economic History, Elsevier, vol. 52(C), pages 93-110.
    6. Rodney Benjamin Edvinsson, 2013. "Swedish GDP 1620-1800 : stagnation or growth ?," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 7(1), pages 37-60, January.
    7. Kerstin Enflo & Anna Missiaia, 2018. "Regional GDP estimates for Sweden, 1571–1850," Historical Methods: A Journal of Quantitative and Interdisciplinary History, Taylor & Francis Journals, vol. 51(2), pages 115-137, April.
    8. Julio Martínez-Galarraga & Joan R. Rosés & Daniel A. Tirado, 2015. "The Long-Term Patterns of Regional Income Inequality in Spain, 1860-2000," Regional Studies, Taylor & Francis Journals, vol. 49(4), pages 502-517, April.
    9. Frank Geary & Tom Stark, 2002. "Examining Ireland"s Post--famine Economic Growth Performance," Economic Journal, Royal Economic Society, vol. 112(482), pages 919-935, October.
    10. Olsson, Mats & Svensson, Patrick, 2010. "Agricultural growth and institutions: Sweden, 1700–1860," European Review of Economic History, Cambridge University Press, vol. 14(02), pages 275-304, August.
    11. Emanuele Felice, 2011. "Regional value added in Italy, 1891–2001, and the foundation of a long‐term picture," Economic History Review, Economic History Society, vol. 64(3), pages 929-950, August.
    12. Wallis, Patrick & Colson, Justin & Chilosi, David, 2018. "Structural change and economic growth in the British economy before the Industrial Revolution, 1500-1800," LSE Research Online Documents on Economics 84510, London School of Economics and Political Science, LSE Library.
    13. Schön, Lennart & Krantz, Olle, 2015. "New Swedish Historical National Accounts since the 16th Century in Constant and Current Prices," Lund Papers in Economic History 140, Lund University, Department of Economic History.
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    More about this item

    Keywords

    regional GDP; Sweden; long-run regional inequality; pre-industrial regional development; Malthusian dynamics;

    JEL classification:

    • N01 - Economic History - - General - - - Development of the Discipline: Historiographical; Sources and Methods
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N93 - Economic History - - Regional and Urban History - - - Europe: Pre-1913

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