Falling real wages during an industrial revolution

Antonio Ciccone

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: The Industrial Revolution was characterized by technological progress and an increasing capital intensity. Why did real wages stagnate or fall in the beginning? I answer this question by modeling the Industrial Revolution as the introduction of a relatively more capital intensive production method in a standard neoclassical framework. I show that {\sl real wages fall in the beginning of an industrial revolution if and only if technological progress in the relatively more capital intensive sector is relatively fast.}

Keywords: Industrial revolution; technological change; capital intensive; production; neoclassical growth model (search for similar items in EconPapers)
JEL-codes: D5 N1 O1 O3 (search for similar items in EconPapers)
Date: 1996-10
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:195

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