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Earnings Inequality in Nineteenth-Century Britain

Published online by Cambridge University Press:  11 May 2010

Abstract

Although debate has raged ever since Marx and Engels openly condemned British capitalism in the 1840s, little hard evidence has been brought to bear on the issue of economic inequality. This paper estimates British earnings distributions for four years in the period 1827–1901. The evidence supports the view of increasing inequality up to mid-century and a leveling thereafter. Coupled with newly available evidence on British eighteenth- and nineteenth-century wealth and income distribution, these estimates equip us to search for explanations. A strategy for modeling British inequality history is suggested.

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Articles
Copyright
Copyright © The Economic History Association 1980

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References

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18 The text relies on the following data drawn from Appendix Table 2 below:

19 On this issue see the excellent discussion in Brown, Phelps, The Inequality of Pay, pp. 256–57Google Scholar, and the section below.

20 Bowley also offered estimates for 1860. In addition, he expanded the figures to include mining and agriculture. This procedure still fails to capture the service sector, but in any case, since Bowley felt that the resulting “deciles were subject to great error” (Wages and Income, p. 45), I have ignored them in the text discussion. The same is true of his “bold attempt” (p. 46) to include all incomes, though this result is included in my Table 3 where the “political arithmetic” estimates are reported.

21 As evidence of the lack of consensus, compare the following statements by two notable participants in the great inequality debate: “Generally, as the historical analyses of economic development have shown, an increase in per capita income has been accompanied by a more equal distribution of income” (R. M. Hartwell, “The Rising Standard of Living in England, 1800–50,” rpt. in Taylor, The Standard of Living, p. 95); “There is, of course, no dispute about the fact that, relatively, the poor grew poorer … and [the] rich and middle class, so obviously grew wealthier” (Hobsbawm, E. J., Industry and Empire [Middlesex, Engl., 1968], p. 91)Google Scholar.

22 The notation “1881/1886” simply indicates that the vast majority of the intra-occupation distribution estimates are based en 1886 data, while the employment weights and mean occupational earnings are based on 1881 data. Similarly for “1901/06.” For simplicity, throughout this paper 1881 = 1881/86 and 1901 = 1901/06.

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24 The form of the regression is simply

where is the inequality statistic for the jth group, Wj the group's mean annual earnings, and t=1881/86 and 1901/06. The results are as follows:

The data for are taken from Table 1, while those for Wj(t) are taken from Appendix Table 1. Male domestics are excluded throughout since income in kind is such a large share of their true income that nominal income estimates of W greatly understate true income.

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