Fallacious convergence? Williamson’s real wage comparisons under scrutiny

Svante Prado ()
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Svante Prado: University of Gothenburg, Gothenburg, Sweden

Cliometrica, Journal of Historical Economics and Econometric History, 2010, vol. 4, issue 2, 171-205

Abstract: The idea of manifest real-wage convergence for unskilled workers in the latter half of the nineteenth century stems from an article from 1995 by Jeffrey G. Williamson. That article presented real wage comparisons of unskilled urban workers for seventeen countries. Sweden, along with the rest of Scandinavia, is found to be an influential case in accounting for much of the alleged factor price convergence taking place. This paper takes a closer look at all the three steps that have to be taken in order to establish real wage comparisons, focusing on Sweden in relation to the US and the UK. The most important findings are twofold. First, that the US–Sweden wage gap is considerably smaller for manufacturing than for building workers, and second, that the rate at which Sweden’s real wages approached the American and the British has been grossly overestimated. Swedish real wages did grow rapidly, but not as rapidly as Williamson’s comparison will have us to believe, because his real wage series does not constitute a representative account of the Swedish unskilled real wage experience. It is argued that, as we suffer from a serious paucity of data for narrow and comparable samples of late nineteenth century unskilled workers, resorting to more encompassing wage measures is a more viable option. That also implies a questioning of the American unskilled wage series, which makes considerably slower progress than the wage series for manufacturing workers.

Keywords: Convergence; Real wages; Wage benchmark; Purchasing power parity; Catching up; International comparisons (search for similar items in EconPapers)
JEL-codes: F20 J30 N30 O47 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:afc:cliome:v:4:y:2010:i:2:p:171-205

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