Abstract
abstractI examine the implications of technological change for productivity, real wages and factor shares during the industrial revolution using recently available data. This shows that real GDP per worker grew faster than real consumption earnings but labour’s share of national income changed little as real product wages grew at a similar rate to labour productivity in the medium term. The period saw modest total factor productivity growth which limited the growth both of real wages and of labour productivity. Economists looking for an historical example of rapid labour-saving technological progress having a seriously adverse impact on labour’s share must look elsewhere.
Highlights
The term ‘Industrial revolution’ is often used to describe economic development in Britain between the 1760s and the 1830s. It is well-known that real wages increased very slowly during this period of acceleration in technological progress which is often seen as an era when the share of wages in national income was under downward pressure in an early example of workers being replaced by machines
Informed by Allen’s account of Engels’ Pause, recent contributions by Frey (2019) and Acemoglu and Restrepo (2019) both draw attention to what they see as a long wait for the innovations of the industrial revolution to benefit workers during which labour’s share of national income fell while highlighting the possibility that today a similar experience may be under way
It does mark a transition to modern economic growth based on sustained technological progress which is the hallmark of the postindustrial revolution West
Summary
The term ‘Industrial revolution’ is often used to describe economic development in Britain between the 1760s and the 1830s It is well-known that real wages increased very slowly during this period of acceleration in technological progress which is often seen as an era when the share of wages in national income was under downward pressure in an early example of workers being replaced by machines. The heart of the matter is to compare the growth of real wages with that of labour productivity In this paper, this is implemented using these new estimates.
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