The Evolution of Global Labor Markets Since 1830 Background Evidence and Hypotheses

Debate over the economic convergence of currently industrialized nations has suffered a number of shortcomings. First, the underlying data base has typically been limited to Agnus Maddison's GNP and GNP per worker hour. This paper offers a new data base, purchasing-power-parity adjusted real wage rates for unskilled labor. Second, the debate has typically focused on end points from the 19th century to the present, paying little attention to differential behavior in four distinct regimes: 1830 to the late 1850s, the 1850s to World War I, the interwar decades, and the post-World War II experience. Third, with some recent exceptions, the search for explanations has focused primarily on technological advance, while ignoring the potential role of global factor and commodity market integration (and disintegration). The new real wage data base confirms some old stylized facts and offers some new ones. It also points out how these four regimes differed. They differed enough to suggest that different explanations will be necessary to account for the convergence over the past century and a half.