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Title: Slow Real Wage Growth during the Industrial Revolution: Productivity Paradox or Pro-Rich Growth?

Author(s): Nicholas Crafts

Publication Date: May 2020

Keyword(s): Engels' pause, Factor shares, industrial revolution, labour productivity and real wages

Programme Area(s): Economic History and International Macroeconomics and Finance

Abstract: I 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 TFP 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.

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Bibliographic Reference

Crafts, N. 2020. 'Slow Real Wage Growth during the Industrial Revolution: Productivity Paradox or Pro-Rich Growth?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14762