Poverty and the Labor Market: Today and Yesterday

Posted: 14 Aug 2020

See all articles by Robert C. Allen

Robert C. Allen

University of Oxford - Nuffield College; New York University (NYU) - New York University Abu Dhabi

Date Written: August 2020


World Bank estimates put absolute poverty in Asia and Africa at 50–60% of the population in 1980 and at negligible levels in the developed world. This review investigates whether Asia was always so poor, as well as the history of poverty in today's rich countries. Poverty measurement methodologies are reviewed, and it is argued that a basic needs approach is the best way to tackle poverty measurement in the past. This approach is related to recent advances in the measurement of historical real wages. Estimates of poverty rates in England between 1290 and 1867 are presented, as are estimates for preindustrial India. About one-quarter of the English population was in extreme poverty in the late Middle Ages, and the proportion had fallen below 10% by 1688. About one-quarter of the people in northern India lived in extreme poverty in the early nineteenth century, and the proportion was likely lower in 1600. The very high poverty rates in India in 1980 were a development of the colonial era.

Suggested Citation

Allen, Robert C., Poverty and the Labor Market: Today and Yesterday (August 2020). Annual Review of Economics, Vol. 12, pp. 107-134, 2020, Available at SSRN: https://ssrn.com/abstract=3669627 or http://dx.doi.org/10.1146/annurev-economics-091819-014652

Robert C. Allen (Contact Author)

University of Oxford - Nuffield College ( email )

United Kingdom

New York University (NYU) - New York University Abu Dhabi ( email )

PO Box 129188
Abu Dhabi
United Arab Emirates

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