DP14295 Italy and the Little Divergence in Wages and Prices: New Data, New Results

Author(s): Mauro Rota, Jacob Weisdorf
Publication Date: January 2020
Keyword(s): Construction, Divergence, industrial revolution, living standards, prices, wages
JEL(s): I3, J3, J4, J8, N33
Programme Areas: Economic History
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14295

We present new and improved long-run wage indices for skilled and unskilled construction workers in Italy. Our data avoid multiple issues pestering earlier wage indices, including regional shifts and sub-contractor mark-ups, making our new indices the first consistent day-wage sequences for early-modern Italy. Our improved wages, obtained from the construction of the St Peter's Church in Rome, consolidate the traditional view that urban Italy began a prolonged economic downturn during the mid-17th century. The wages also offer sustenance to the idea that epidemics instigated the country's long decline. Comparison with newly downscaled construction wages for London show that Roman workers, despite Italy's downturn, out-earned their early-modern English counterparts. This suggests that high wages alone were not enough to trigger industrialisation.