Epidemic disease and real wages during the British Industrial Revolution

Nowadays, the conquest of epidemic disease through vaccination is unambiguously good news. But before the Industrial Revolution it would have been more of a mixed blessing; lower mortality rates threatened falls in real wages. During the Industrial Revolution however, although the population of Britain grew rapidly– in part due to vaccinations – real wages also grew (albeit slowly). This, Nicholas Crafts argues, lends an important perspective to the impact of the Industrial Revolution on living standards.

The so-called ‘standard-of-living debate’ is a staple of British economic history. For decades ‘optimists’ and ‘pessimists’ have argued about how fast, if at all, the living standards of the working classes rose during the Industrial Revolution over the period from 1780 to 1840. The progress of real wages in these years has been at the heart of the matter. Recent research has tended to argue that real wages increased very slowly. The author of the most-cited estimates, Charles Feinstein (1998), gave his famous paper the title ‘Pessimism Perpetuated’ and suggested that it was almost a century before the majority of the working class obtained any economic benefits from the Industrial Revolution.

It is, however, important to place trends in real wages in a demographic context (Table 1). The late 18^th and early 19^th centuries saw a surge in population growth which peaked at about 1.5% per year in the early 1820s. This was propelled both by increases in the birth rate resulting largely from changes in age at marriage and also, to a lesser extent, decreases in the death rate. The population of England more than doubled between 1781 and 1841.

Table 1. Demographic Trends

Source: Wrigley et al. (1997).

A large decline in mortality from epidemic diseases was the main reason for the reduction in the death rate (Davenport, 2017). These diseases included malaria, typhus and especially smallpox. The reasons were various including drainage of waterlogged areas, effective policies of quarantine and isolation, and for smallpox, first inoculation and then vaccination. Vaccination was shown to be effective by Edward Jenner in 1796 and subsequently played a large part in the near elimination of smallpox during the first half of the 19^th century. Life expectancy at birth rose from 35.4 years in 1761 to 41.7 years in 1841 even though the period saw the very rapid growth of unhealthy urban areas.

There is general agreement among demographic historians that before the Industrial Revolution rapid population growth was a threat to real wages given the importance of land in production and limited innovation capabilities. My recent paper with Terence Mills (2020) estimates that before the mid-18^th century population growth of 0.4% per year was the ‘speed limit’ (or, more formally, the ‘rate of absorption’) if real wages were to be maintained. Our modelling and a review of the historical evidence strongly suggests that the subsequent surge in population growth resulted from exogenous shocks to fertility and mortality.

These shocks would have had severe consequences for real wages in the pre-industrial revolution economy. We estimate that, if the ‘speed limit’ had remained at 0.4% per year, then these demographic shocks threatened to reduce real wages to 18.5% of the 1780 level by 1840 (Table 2). Even with the fertility shock suppressed, simulation of the model predicts that the shock to mortality would have delivered a reduction in real wages to 48% of the 1780 level by 1840. In this context, as Tony Wrigley has observed, the growth of real wages in the early 19^th century, albeit slow, was ‘a remarkable achievement’.

Table 2. Real Earnings Relative to 1780 Level: Actual and Simulated with 1570–1760 Rate of Absorption 

Note: real earnings in 1800 depressed by spike in grain prices.

Source: derived from Crafts and Mills (2020)

The reason that real wages did not decline in the face of serious population pressure was that during the Industrial Revolution the economy’s ability to withstand demographic shocks was greatly increased by technological progress and reduced dependence on land. The rate of absorption had risen to perhaps 1.5% per year. Taking this perspective, Feinstein was wrong: the economic benefits of the Industrial Revolution for the working class were realised straightaway through the protection that it provided against big reductions in living standards.

Nicholas Crafts, University of Sussex, University of Warwick and CAGE

Further reading

Crafts, N. and Mills, T. C. (2020), ‘The Race between Population and Technology: Real Wages in the
First Industrial Revolution’, CAGE Working Paper No. 502.

Davenport, R. (2017), ‘The First Stages of the Mortality Transition in England: a Perspective from
Evolutionary Biology’, Working Paper, Department of Geography, University of Cambridge.

Feinstein, C. H. (1998), ‘Pessimism Perpetuated: Real Wages and the Standard of Living during and after the Industrial Revolution’, Journal of Economic History, 58: 625-658.

Wrigley, E. A., Davies, R. S., Oeppen, J. E. and Schofield, R. S. (1997), English Population History from
Family Reconstitution, 1580-1837. Cambridge: Cambridge University Press.