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Published online by Cambridge University Press: 03 March 2009
The loss to the English economy caused by decreased migration resulting from relief payments to agricultural laborers is estimated. I conclude that, at worst, the Poor Law had a small negative impact on national product. If poor relief and wages were substitutes, the Poor Law may have had a positive impact on capital formation and economic growth.
The author is Assistant Professor, Department of Labor Economics, New York State School of Industrial and Labor Relations, Cornell University, Ithaca, New York 14851–0952.
I would like to thank Claudia Goldin, Peter Lindert, Mary MacKinnon, Joel Mokyr, and Jeffrey Williamson for helpful comments on an earlier version of this paper.
1 The idea that the Poor Law “may have had some overall positive effects on the Industrial Revolution” was recently suggested by Mokyr, Joel, “The Industrial Revolution and the New Economic History,” in Mokyr, Joel, ed., The Economics of the Industrial Revolution (New York, 1985), pp. 14–15. The results of this paper support some of Mokyr's hypotheses.Google Scholar
2 Redford, Arthur, Labour Migration in England, 1800–1850 (1st ed., 1926; 2nd ed., New York, 1968), pp. 93–94.Google Scholar
3 Polanyi, Karl, The Great Transformation (New York, 1944), p. 94.Google Scholar
4 Despite the extensive literature on the Old Poor Law, very little is known about the composition of the “pauper host.” The Poor Law acted as “a welfare state in miniature,” relieving not only able-bodied laborers but also aged and infirm persons, widows, and orphans. Unfortunately, available data do not enable us to distinguish among types of recipients. Instead of trying to estimate the proportion of relief expenditures going to agricultural laborers' families, I chose three plausible values for it (33 percent, 50 percent and 67 percent), and provide three estimates of each result in Tables 1 to 4. For the counties included in the analysis, the proportion of families chiefly employed in agriculture as of 1831 varied from 0.33 to 0.57. These data, along with the fact that able-bodied laborers were not the sole recipients of relief, suggest that the actual proportion of relief expenditures going to agricultural laborers and their families was somewhere between 0.33 and 0.5.
5 Data on the wage rates of London laborers were obtained from Bowley, Arthur, Wages in the United Kingdom in the Nineteenth Century (Cambridge, 1900), p. 93.Google Scholar Henry Mayhew estimated that 30 percent of workers in the London building trade were unemployed during slack seasons. Cited in Jones, Gareth Stedman, Outcast London (Oxford, 1971), p. 41. If the slack season was six months long, a laborer's expected number of weeks worked per year would be 26 + 7(26), or 44.2.Google Scholar
6 Cost of living data was obtained from Crafts, N.F.R., “Regional Price Variations in England in 1843: An Aspect of the Standard-of-Living Debate,” Explorations in Economic History, 19 (01. 1982), p. 62.CrossRefGoogle Scholar
7 Wage data for Manchester builders' laborers was obtained from Bowley, Arthur, “The Statistics of Wages in the United Kingdom during the Last Hundred Years—Wages in the Building Trades,” Journal of the Royal Statistical Society, 63 (1900), p. 310.Google Scholar Data on agricultural laborers' wages was obtained from Bowley, , Wages in the United Kingdom, table at end of book.Google Scholar
8 Data on national product were obtained from Deane, Phyllis and Cole, W. A., British Economic Growth 1688–1959 (2nd ed., Cambridge, 1967), p. 166. The loss in national product was also estimated for other values of βa and βm. Assuming that βa = –0.5 and βm = –1.0, the estimated dead-weight loss was equal to £377,000. For βa = –1.0 and βm = –1.0, the estimated dead-weight loss equaled £546,000. Obviously, the choice of own-wage elasticities does not have a large impact on the estimated loss in national product.Google Scholar
9 Commodity output grew at an annual rate of 2.50 percent from 1821 to 1831. Crafts, N.F.R., British Economic Growth During the Industrial Revolution (Oxford, 1985), p. 47.Google Scholar
10 The estimates of the income elasticity of migration were obtained from Vedder, Richard and Cooper, David, “Nineteenth Century English and welsh Geographic Labor Mobility: Some Further Evidence,” Annals of Regional Science, 8 (06 1974), p. 134;CrossRefGoogle Scholar and Greenwood, Michael and Thomas, Lloyd, “Geographic Labor Mobility in Nineteenth Century England and Wales,” Annals of Regional Science, 7 (12. 1973), p. 102.CrossRefGoogle Scholar
11 Deane, and Cole, , British Economic Growth, p. 118.Google Scholar
12 The income elasticity of migration estimate was obtained from Todaro, Michael, “Internal Migration in Developing Countries: A Survey,” in Easterlin, Richard, ed., Population and Economic Change in Developing Countries (Chicago, 1980), p. 380. The best-guess estimate assumes that 50 percent of relief expenditures went to agricultural laborers.Google Scholar
13 Williamson found the urban disamenities premium to be between 7 and 13 percent in the North of England during the 1830s and 1840s. The estimated disamenities premium for intraregional migration in the South was negative. Williamson, Jeffrey G., “Was the Industrial Revolution Worth It? Disamenities and Death in 19th Century British Towns,” Explorations in Economic History, 19 (07 1982), p. 232.CrossRefGoogle Scholar
14 Williamson, Jeffrey G., “City Immigration, Selectivity Bias and Human Capital Transfers during the British Industrial Revolution,” Harvard Institute of Economic Research, Discussion Paper No. 1171 (07 1985), pp. 8–14.Google Scholar
15 Boyer, George R., “An Economic Model of the English Poor Law circa 1780–1834,” Explorations in Economic History, 22 (04. 1985), pp. 157–58.CrossRefGoogle Scholar For evidence that labor-hiring farmers followed such policies, see Digby, Anne, Pauper Palaces (London, 1978), pp. 105–106;Google Scholar and Boyer, George R., “The Old Poor Law and the Agricultural Labor Market in Southern England: An Empirical Approach,” this JOURNAL, 46 (03 1986), p. 130.Google Scholar
16 Data on the distribution of poor rate assessments in Suffolk, and Southampton, was obtained from “Returns Relating to Rating of Tenements in Lancashire, Suffolk, Hampshire, and Gloucestershire,” House of Commons, Accounts and Papers, 47 (London, 1849), pp. 618–19.Google Scholar
17 A complete assessment for Terling, Essex, in 1801 showed that 11.3 percent of the poor rate came from assessments of less than £20, and 32.8 percent came from assessments of less than £50 (Essex Record Office, D/P 299/12/4). To obtain an upper bound estimate of the proportion of the poor rate paid by non-labor-hiring taxpayers, suppose that £50 of assessed value marked the cutoff between labor-hiring and non-labor-hiring taxpayers. The Terling data then suggest that about one-third of the poor rate was paid by non-labor-hiring taxpayers. However, increasing the value of(l – λ) from 0.2 to 0.33 does not have a significant impact on the conclusion regarding the effect of poor relief on migration.
18 Of course, this model would also apply if workers' reservation income was less than the marginal product of labor.
19 For a further discussion of this model, see Boyer, , “An Economic Model of the English Poor Law,” pp. 154–61.Google Scholar
20 Feinstein, Charles, “Capital Formation in Great Britain,” in Mathias, Peter and Postan, M. M., eds., Cambridge Economic History of Europe, (Cambridge, 1978), vol. 8, part 1, p. 75.Google Scholar
21 In 1831, the 15 southeastern counties included in Table 4 contained about 27 percent of the adult male agricultural laborers in Great Britain. My assumption that 40 percent of capital formation in agriculture took place in these counties is meant to yield a lower bound estimate for the ratio of the income subsidy received by farmers to the amount of fixed capital formation.
22 Wage data were obtained from Bowley, , Wages in the United Kingdom, p. 83Google Scholar and table at end of book. Cost of living data came from Lindert, Peter H. and Williamson, Jeffrey G., “English Workers' Living Standards During the Industrial Revolution: A New Look,” Economic History Review, 2nd series, 36 (01. 1983), p. 11.Google Scholar
