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Great Divergence

Allen wage series

The reconstructed series of unskilled male day-wages and consumer-basket prices for roughly ten European cities (London, Amsterdam, Antwerp, Paris, Strasbourg, Vienna, Florence, Milan, Madrid, Leipzig) and several Asian cities (Beijing, Delhi, Istanbul, Edo/Tokyo), originally published in Allen’s 2001 Explorations in Economic History paper and developed across his subsequent work. Wages are expressed in two normalizations: silver (grams of silver per day) and a “respectability” subsistence basket that allows direct comparison of real welfare across cities and over time.

The series is the empirical foundation of Allen’s high-wage / cheap-energy thesis and is the most-cited single empirical resource in modern Industrial Revolution debates. It is also the central dataset under contention in the recent wave of revisionist work questioning whether the British wage premium is overstated.

Coverage

Section titled “Coverage”
  • Time: ~1300–1913, varying by city.
  • Variables: silver day-wages for unskilled (labourers’) and skilled (craftsmen’s) workers; consumer-basket prices; real wages expressed in “welfare ratios” (multiples of subsistence requirement).
  • Geography: ~10 European cities, ~4 Asian cities, with progressively more coverage over time. Continental cities are more thinly sourced before 1500; Asian cities mostly from 1700 onward.

Headline empirical claims (in dispute)

Section titled “Headline empirical claims (in dispute)”
  • London labourers in the 18th century earned roughly twice the silver wages of contemporary Amsterdam, Paris, or Strasbourg labourers, and roughly four times those of Beijing or Delhi labourers.
  • The London wage premium emerged after the Black Death and persisted through the early modern period, in contrast with falling continental wages.
  • The “welfare ratio” of London labourers — wages relative to the cost of a respectability subsistence basket — was roughly 4 in the 18th century vs. ~2 for continental cities and ~1 for Asian cities (i.e., London labourers could consume 4 subsistence baskets per day; Beijing labourers, only one).
  • The British high-wage / cheap-energy combination is what made labour-saving capital-intensive innovation profitable to invent and adopt in Britain first.

What to be skeptical of

Section titled “What to be skeptical of”

  • What the wage figures represent. Stephenson (2018) argued that Allen’s London wages — drawn from Greenwich Hospital and other large building-trade institutional accounts — are contractor fees, not labourer earnings. After accounting for contractor margins, individual London builders may have earned 20–30% less than Allen’s published series suggest, materially shrinking the British wage premium. Allen has responded defending the broad case while conceding particulars; the dispute is unresolved.

  • Days worked per year. The day-rate × 250 working days assumption that converts day-wages to annual incomes overstates real annual earnings, since 18th-century building workers worked fewer than 250 days/year on average. Stephenson’s revised estimates account for this.

  • The choice of comparator. Allen’s “labourer” data come from large institutional projects (hospitals, royal palaces, naval yards). These may not represent the typical labour-market experience. Humphries & Schneider (2019) made an analogous point for spinning — the lead sector of British industrialization, dominated by women and children, where wages were low across the period.

  • The Asian comparisons are thin. Beijing wages from 1738 onward (Allen, Bassino, Ma, Moll-Murata, van Zanden 2011) are reconstructed from substantially fewer sources than the European series. Delhi/Calcutta wages are even thinner. The Asia-Europe wage gap may be real but its magnitude has wider error bars than commonly suggested.

  • What “subsistence basket” means. Allen’s “bare bones” basket is a normative construct (sufficient calories, basic clothing, fuel for cooking). Different scholars choose different baskets and get different welfare ratios. The cross-city comparisons are sensitive to the basket choice.

Source

Section titled “Source”