Stephenson (2018) — Looking for Work?

Citation. Stephenson, Judy Z. “‘Looking for Work?’ Or ‘Looking for Workers?’ Days and Hours of Work in London Construction in the Eighteenth Century.” Economic History Review 71(1), 2018: 106–132.

Summary

The most consequential recent challenge to Robert Allen’s high-wage thesis. Stephenson conducted detailed archival work on the wage records that Allen’s London real-wage series rest on — primarily Greenwich Hospital and other large institutional building projects — and shows that the figures recorded in those institutional accounts were not what individual labourers received. They were fees paid to labour contractors who then paid out to actual workers, after deducting their margins. The actual take-home pay of the London building worker was, by Stephenson’s reconstruction, 20–30% below the figures used by Allen.

If correct, this finding cuts substantially into the “London wage premium” that is empirical foundation of Allen’s induced-innovation account: the British real-wage advantage over continental cities shrinks, and the wage/energy ratio that supposedly made labour-saving innovation profitable in Britain weakens. Stephenson’s paper opened a still-active dispute — Allen has responded (Allen 2019, Economic History Review) defending the broad case while conceding particulars; subsequent papers by both authors and others have continued the debate.

Key claims

• The wage figures in Greenwich Hospital and other large institutional building accounts represent payments to labour contractors, not earnings of individual builders.
• After accounting for contractor margins, actual London builder wages were 20–30% below Allen’s published figures.
• The “London wage premium” central to Allen’s high-wage thesis is therefore overstated, weakening the empirical case for that thesis.
• The day-rates Allen used also do not account for the actual number of days worked per year, which was substantially less than the implicit assumption of full-year employment — further compressing real annual earnings.
• The wage-data infrastructure that Allen and the broader European real-wage literature have built needs systematic re-examination from primary sources.