Advanced

Between Malthus and the industrial take-off: regional inequality in Sweden, 1571-1850

Enflo, Kerstin LU and Missiaia, Anna LU (2017) In Lund Papers in Economic History. General Issues
Abstract
The causes and extent of regional inequality in the process of economic growth are at the core of historical economic research. So far, much attention has been devoted to studying the role of industrialization in driving regional divergence. But empirical studies on relatively unequal countries such as Italy or Spain show that inequality was already high when their modern industrialization began (Felice, 2011; Rosés et al., 2010). This paper studies the extent and drivers of pre-industrial inequality for the first time with reference to a pre-industrial European economy. Using new estimates of regional GDP for the regions of Sweden for the period 1571-1850 (Enflo and Missiaia, 2017), we find that regional inequality increased dramatically... (More)
The causes and extent of regional inequality in the process of economic growth are at the core of historical economic research. So far, much attention has been devoted to studying the role of industrialization in driving regional divergence. But empirical studies on relatively unequal countries such as Italy or Spain show that inequality was already high when their modern industrialization began (Felice, 2011; Rosés et al., 2010). This paper studies the extent and drivers of pre-industrial inequality for the first time with reference to a pre-industrial European economy. Using new estimates of regional GDP for the regions of Sweden for the period 1571-1850 (Enflo and Missiaia, 2017), we find that regional inequality increased dramatically between 1571 and 1750 and stayed high until the mid-19th century. This result discards the view that industrial take-off was the main driver of regional divergence. Decomposing the Theil index for GDP per worker, we find that the bulk of inequality from 1750 onwards was driven by structural differences across sectors rather than different regional productivity within sectors. We then show that counties with higher agricultural productivity followed a classic Malthusian pattern in its population dynamics when experiencing technological advancement, while ones with higher industrial productivity did not. The difference in the two sectors is what boosted pre-industrial regional inequality. We suggest that institutional factors such as the creation of the Swedish Empire, the monopoly trading rights for Stockholm and the protective industrial policy explain this exceptional pattern.

(Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
Regional GDP, Sweden, long-run regional inequality, pre-industrial regional development, Malthusian dynamics, N01, N13, N93
in
Lund Papers in Economic History. General Issues
issue
2017:168
pages
31 pages
publisher
Department of Economic History, Lund University
language
English
LU publication?
yes
id
f739c06c-34dd-40cd-aae3-5a4c1a79e837
date added to LUP
2017-12-08 14:39:06
date last changed
2017-12-08 14:40:10
@misc{f739c06c-34dd-40cd-aae3-5a4c1a79e837,
  abstract     = {The causes and extent of regional inequality in the process of economic growth are at the core of historical economic research. So far, much attention has been devoted to studying the role of industrialization in driving regional divergence. But empirical studies on relatively unequal countries such as Italy or Spain show that inequality was already high when their modern industrialization began (Felice, 2011; Rosés et al., 2010). This paper studies the extent and drivers of pre-industrial inequality for the first time with reference to a pre-industrial  European economy. Using new estimates of regional GDP for the regions of Sweden for the period 1571-1850 (Enflo and Missiaia, 2017), we find that regional inequality increased dramatically between 1571 and 1750 and stayed high until the mid-19th century. This result discards the view that industrial take-off was the main driver of regional divergence. Decomposing the Theil index for GDP per worker, we find that the bulk of inequality from 1750 onwards was driven by structural differences across sectors rather than different regional productivity within sectors. We then show that counties with higher agricultural productivity followed a classic Malthusian pattern in its population dynamics when experiencing technological advancement, while ones with higher industrial productivity did not. The difference in the two sectors is what boosted pre-industrial regional inequality. We suggest that institutional factors such as the creation of the Swedish Empire, the monopoly trading rights for Stockholm and the protective industrial policy explain this exceptional pattern.<br/><br/>},
  author       = {Enflo, Kerstin and Missiaia, Anna},
  keyword      = {Regional GDP,Sweden,long-run regional inequality,pre-industrial regional development,Malthusian dynamics,N01,N13,N93},
  language     = {eng},
  note         = {Working Paper},
  number       = {2017:168},
  pages        = {31},
  publisher    = {Department of Economic History, Lund University},
  series       = {Lund Papers in Economic History. General Issues},
  title        = {Between Malthus and the industrial take-off: regional inequality in Sweden, 1571-1850},
  year         = {2017},
}