Labor productivity in the United States and the United Kingdom during the nineteenth century

A number of writers have recently questioned whether labor productivity or per capita incomes were ever higher in the United Kingdom than in the United States. This paper focuses on aggregate and sectoral labor productivity in the two countries during the nineteenth century. We build on earlier work by Broadberry to push comparative productivity estimates back to 1840 based on a time series projection from a 1910 benchmark and checked against a benchmark estimate for 1850. The results indicate that labor productivity in agriculture was broadly equal in the two countries, and that the United States had a substantial labor productivity lead in industry as early as 1840, while the United Kingdom was ahead in services. Hence aggregate labor productivity and per capita incomes were higher in the United Kingdom in the mid-nineteenth century, particularly since the United States had a larger share of the labor force in low value-added agriculture and a smaller share of the population in the labor force.     

THE SECOND NOEL BUTLIN LECTURE: LABOUR-INTENSIVE INDUSTRIALISATION IN GLOBAL HISTORY

East Asian industrialisation has shown that modern industry has occurred across different cultures under a variety of factor-endowment conditions. The global history of the diffusion of industrialisation over the past two centuries suggests two distinct routes. The first is the 'Western path' associated with capital- and energy-intensive industry. The second path to creating a modern industrial economy is the 'East Asian path' based on labour-intensive industrialisation that has built on quality labour resources cultivated in the traditional sector. This was the path followed by Japan from the nineteenth century and by many other countries in Asia during the twentieth century.     

Growth convergence reconsidered

Growth Rate Convergence Reconsidered. —While convergence properties lie at the heart of the endogenous-exogenous growth debate, the empirical literature on convergence to date remains ambiguous. Results appear to be particularly sensitive to the choice of income per capita or labor productivity as dependent variable. The paper shows that the dependence reflects a measurement error arising from the interdependence of human capital accumulation, labor force participation rates and development levels. Estimation of a corrected convergence equation yields results generally supporting convergence except in the manufacturing sector.     

EMPTOR AUSTRALIS: THE AUSTRALIAN CONSUMER IN EARLY TWENTIETH CENTURY ADVERTISING LITERATURE

Well aware that it is the consumer who makes or breaks an advertisement, the advertising industry has long paid close attention to its audience. However, advertising historians have generally overlooked the industry's efforts to define the consumer and the impact this has had upon advertisements and the advertising industry itself. By examining the changing conceptualisation of the Australian consumer featured in the locally produced advertising literature during the early twentieth century, this study offers an insight into the inner workings of Australia's fledgling advertising industry. It demonstrates the ways in which advertising interacted with the world around it.     

COLONIALISM AND INDUSTRIALISATION: FACTORY LABOUR PRODUCTIVITY OF COLONIAL KOREA, 1913–37

Unlike other colonial economies, Korea industrialised rapidly during its colonial period, which past scholars attributed to the industrialisation policy directed by the Japanese colonial government between 1930 and 1945. Our analysis of factory labour productivity from 1913 to 1937 suggests significant revisions to this claim. Factory labour productivity as well as total production grew rapidly before the active intervention of the colonial government. In addition, Korean entrepreneurs invested heavily in their firms and successfully competed with Japanese entrepreneurs. We conjecture that the pre-war experience of Korean entrepreneurs provided a critical foundation for the post-colonial economic growth.     

'LAYIN' LOW AND SAYIN' NUFFIN': AUSTRALIA'S POLICY TOWARDS BRITAIN'S SECOND BID TO JOIN THE EUROPEAN ECONOMIC COMMUNITY (1966–67)

This article examines the problems and challenges which confronted the Australian government in its response to Britain's second attempt to join the European Economic Community (EEC) in 1967. While an adequate body of literature exists on Australia's policy towards Britain's first application to the EEC (1961–63), the Australian government's response to the 1967 bid has been completely ignored by historians. This article, therefore, aims to make a historical contribution to the understanding of Australia's policy towards Britain's 'turn to Europe'.     

RELATIVE FACTOR PRICES IN THE PERIPHERY DURING THE FIRST GLOBAL CENTURY: ANY LESSONS FOR TODAY?

Globalisation before 1939 had profound effects on factor prices and income distribution, especially between the industrialising core economies and the economies of periphery. Jeffrey Williamson reflects briefly on: the impact of globalisation on relative factor price convergence; the interaction between commodity market convergence and convergence in labour and capital markets; and whether the nineteenth history of the periphery was a different history from that of the industrialising European core. Williamson concludes with observations on why the blacklash against globalisation is less severe today than it was during the first global century.     

Economic Stagnation and Crisis in Korea during the Eighteenth and Nineteenth Centuries

In contrast to rapid economic growth in the twentieth century, Korea suffered a long economic decline in the eighteenth and nineteenth centuries, with the failure accelerating from 1850 to 1890. According to 36 different harvest records, rice productivity continuously declined from the early eighteenth to the late nineteenth centuries due to deforestation and increase in natural disasters. Contraction of rural markets after the interruption of trade with Japan also contributed to the decrease in rice production. The third reason for the nineteenth‐century crisis was the dissolution of the government‐led grain storage and redistribution system. Finally, the ultimate culprit for the crisis could be found in Confucianism with which the Joseon Dynasty was unable to properly understand and respond to the crisis.     

A CLIOMETRIC REVOLUTION IN THE ECONOMIC HISTORY OF KOREA: A CRITICAL REVIEW

Cliometric approaches to the economic history of Korea have emerged as a distinctive trend from the mid‐1990s. They have quickly made profound changes to our understanding of Korea's economic history from 1700 to 1945. The most remarkable include identifying the long‐term decline of agricultural productivity from around 1800, the subsequent upswing in economic development from the late nineteenth century, and the continuing growth during the Japanese colonial era, 1910–45. We survey primarily the Korean language literature that reports the achievements of this cliometric movement and speculate about the future research agenda.     

When and why did eastern European economies begin to fail? Lessons from a Czechoslovak/UK productivity comparison, 1921–1991

Czechoslovak industrial labour productivity fluctuated around two-thirds of the UK level under the private sector regime between the wars. Under the central planning regime of the postwar period, Czechoslovakia's comparative productivity position initially improved to around three-quarters of the UK level by the early-1960s, before falling back. During the 1980s, the deterioration of Czechoslovakia's productivity performance accelerated sharply, falling to around one-third of the UK level. Central planning was able to achieve a satisfactory productivity performance during the era of mass production, but could not adapt to the requirements of flexible production technology during the 1980s.     

Openness and total factor productivity in Swedish manufacturing, 1980–1995

Openness and Total Factor Productivity in Swedish Manufacturing, 1980–1995. — This paper studies the effect of openness on total factor productivity (TFP) growth. Using industry-level data for Swedish manufacturing from 1980 to 1995, the paper shows that integrated industries tend to be more engaged in R&D and have more entry and exit activity than other industries. The results show that domestic R&D intensity does not contribute to the TFP growth rate. Instead, openness to international markets, which helps facilitate technology spillovers, is an important factor. There is also some evidence that producers exiting the market are less productive, implying that such exits will increase the average productivity of the industry.     

Real Wages in Australia and Canada, 1870–1913: Globalization versus Productivity

Australia's and Canada's real wage experiences between 1870 and 1913 were distinctive. Faster productivity growth underpinned Canada's overtaking of Australia's wage levels. The globalization forces of migration and trade also shaped their comparative wages, principally by reducing wage growth in Canada. Immigration increased slightly Australia's real wages, but reduced wage levels in Canada, and tempered there the beneficial effects of rising productivity and improving terms of trade. In contrast, wage earners' share of national income rose after 1890 in Australia, with the productivity slowdown hitting chiefly rents and profits. Distributional shifts favouring wage earners in Australia, and the depressing effects of mass immigration on wages in Canada, limited Canada's wage lead before 1914, despite her faster productivity growth.     

Institutions, wages, and inequality: The case of Europe and its periphery (1500–1899)

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.     

COMMENTS ON FACTOR PRICES AND INCOME DISTRIBUTION IN LESS INDUSTRIALISED ECONOMIES, 1870–1939: REFOCUSING ON THE FRONTIER

A great deal of the current research into nineteenth- and twentieth-century globalisation has been focused through a neoclassical trade theory lens. Applying the Stopler-Samuelson paradigm from Heckscher-Ohlin trade theory, the result is an approach that sees price convergence as pivotal in defining, identifying, and measuring globalisation. This focus, however, obscures the implications of frontier incorporation and other insights achieved by viewing nineteenth-century globalisation as a mechanism whereby peripheral economies were incorporated into the core of organised economic activity. A frontier-centred perspective also reintroduces the role of economic institutions as a crucial element of economic growth and development.     

Australian Labour Market Institutions Through Time: A Perspective from the New Institutional Economics

One of the distinguishing characteristics of the Australian economy over most of the past century has been its labour market institutions and organizations. Recently these institutions have changed to become more decentralized. Douglas North has argued that examining and explaining institutional change through time is an important and comparatively unresearched topic facing economic historians. In this paper, changes to Australia's labour market institutions are examined from the perspective of the New Institutional Economics. Following North, it is argued that further research should be directed to identifying the role ideological beliefs have played in shaping Australia's labour market institutions over time.     

Industrial Structural Change and Economic Growth in China, 1987–2008

The present paper studies the sources of economic growth and the nature of structural change in the Chinese economy from 1987 to 2008. Using a methodology that evaluates the contribution of an industry to economic growth, the present paper shows that the post‐2000 subperiod marked an increased reliance on the services sector as a source of growth in the Chinese economy. Much of the acceleration in real GDP or aggregate labor productivity growth in China in the post‐2000 subperiod compared to the pre‐2000 period can be traced to an increased contribution from service‐producing and high‐technology exporting manufacturing industries. The evidence indicates that the Chinese economy has been rebalancing toward domestic consumption and shifting its export sector toward high‐technology manufacturing industries.     

THE SWEDISH WAGE–RENTAL RATIO AND ITS DETERMINANTS, 1877–1926

Trends in wage–rental ratios figure prominently in the recent literature on factor price convergence and globalisation in the late nineteenth century. Sweden has been described as a free-trade country whose wage–rental ratio exhibited a distinctive upward trend before World War I. This article presents a new land price series that indicates an increase in land rentals and an evolution of the wage–rental ratio more in line with other European protectionist countries. We explore the determinants of the Swedish wage–rental ratio and assess the relative importance of protectionism and changes in Swedish farming's product mix from crop to animal products.     

Factor prices and productivity growth during the British industrial revolution

This paper presents new estimates of total factor productivity growth in Britain for the period 1770-1860. We use the dual technique and argue that the estimates we derive from factor prices are of similar quality to quantity-based calculations. Our results provide further evidence, calculated on the basis of an independent set of sources, that productivity growth during the British Industrial Revolution was relatively slow. The Crafts-Harley view of the Industrial Revolution is thus reinforced. Our preferred estimates suggest a modest acceleration after 1800.     

The Role of Agriculture on the Recent Brazilian Economic Growth: How Agriculture Competes for Resources

Drawing upon the Global Trade Analysis Project (GTAP) database, and other time series data, we construct a multi‐sector Ramsey model that shows the transition growth of the Brazilian agricultural sector and its effects on growth of the industrial and service sector of the economy, with particular emphasis given to the years 1994–2010. Our results capture the importance of the agriculture's capital intensity and the sector's factor productivity on the sector's growth, the substitution of capital for labor in agriculture, and the sustaining of agriculture's share in Brazilian GDP. These features are rather unique among emerging economies, most of which have experienced a transition out of agriculture and growth in nonfarm production relative to agriculture.     

Firm Productivity,Innovation, and Financial Development

How do firm‐specific actions—in particular, innovation—affect firm productivity? What is the role of the financial sector in facilitating higher productivity? Using a rich firm‐level data set, we find that innovation is crucial for firm performance as it directly and measurably increases productivity. The impact of innovation on productivity is larger in less‐developed countries. Evidence of financial sector development influencing the innovation‐productivity link is weak, but the effect is difficult to identify due to correlation between indicators of a country's financial and nonfinancial development. Furthermore, we find evidence that the innovation effect on productivity is more significant for high‐tech firms than for low‐tech firms.