Italy and the Industrial Revolution: Evidence from Stable Employment in Rural Areas

54 Pages Posted: 8 May 2020

See all articles by Mauro Rota

Mauro Rota

Sapienza University of Rome

Jacob Weisdorf

Centre for Economic Policy Research (CEPR)

Date Written: April 2020

Abstract

We provide a first-ever long-run index of wages of stable rural workers in early-modern Tuscany. These wages speak to two longstanding debates. The first concerns whether Italy's early-modern downturn was an urban phenomenon only or an all-embracing one. Our data lend support to the former, since we do not detect any downturn in our early-modern rural wages. The second debate concerns whether high-waged workers prompted the Industrial Revolution. Earlier studies in this debate have been criticised for comparing urban wages when early factories emerged in rural areas. By comparing rural wages, we find that English labour cost only 10 per cent more than their Italian counterparts in 1650, but a staggering 150 per cent more in 1800. The revised timing of the divergence between England and Italy, and its overlap with England's early mechanisation, raise a significant identification problem. Did high wages encourage mechanisation, or did mechanisation boost wages?

Keywords: economic growth, Great Divergence, industrial revolution, living standards, prices, Stable Employment, Wage premia, wages

JEL Classification: I3, J3, J4, J8, N33

Suggested Citation

Rota, Mauro and Weisdorf, Jacob, Italy and the Industrial Revolution: Evidence from Stable Employment in Rural Areas (April 2020). CEPR Discussion Paper No. DP14652, Available at SSRN: https://ssrn.com/abstract=3594283

Mauro Rota (Contact Author)

Sapienza University of Rome ( email )

Piazzale Aldo Moro, 5
Rome, 00185
Italy

Jacob Weisdorf

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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