ExternalitiesReal Income and Economic Growth in England Analysis Essay

Real Income and Economic Growth in England
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Real Income and Economic Growth in England
Unreal Wages? Real Income and Economic Growth in England, 1260 – 1850 by Jane Humphries and Jacob Weisdorf, challenges the accuracy of earlier historical workers’ annual income estimates founded on day wage rates. The paper proposes a more accurate way of determining historical workers’ yearly incomes using a twelve-monthly income series founded on laborers in Britain and annual pay rather than day wages. Its revised labor incomes challenge previous assumptions that the working year before the Industrial Revolution comprised at all times and places of 250 days. The paper’s revised estimates also show that labor’s share has been shifting across six centuries of British history. The prevailing global slump in labor’s share is typical of historical fluctuations.
Humphries and Weisdorf (2019) question the rudimentary assumption employed by previous studies that laborers worked at all times and places for 250 days per year. They show that while this supposition is not unreasonable in the current world, it is erroneous in the historical context because day-workers were always worse off than their land-owning colleagues and also because it involves a wholly inelastic labor supply. Besides, an unwavering working year's assumption places per capita GDP and labor incomes on dissimilar growth paths. These divergences have resulted in the ‘Golden Age of Labor’ and ‘Engels Pause’ narratives that still call for clarification.
The paper is the first to use an estimation method centered on Clark and Van der Werf’s labor market arbitrage that suggests that day and yearly rates allow the calculation of the working year required in day labor to find the wages received yearly laborers. This method reveals that previous estimates of yearly labor incomes founded on daily salary rate...