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Anonymity, efficiency wages and technological progress

Research output: Contribution to journalArticle

  • Stephen Broadberry
  • Sayantan Ghosal
  • Eugenio Proto
Original languageEnglish
Pages (from-to)379-394
Number of pages16
JournalJournal of Development Economics
Volume127
Early online date27 Jun 2016
DOIs
DateAccepted/In press - 21 Jun 2016
DateE-pub ahead of print - 27 Jun 2016
DatePublished (current) - 1 Jul 2017

Abstract

Although the industrial revolution is often characterized as the culmination of a process of commercialisation, the precise nature of such a link remains unclear. This paper provides an analysis of one such link: the role of commercialisation in raising wages as impersonal labour market transactions replace personalized customary relations. In the presence of an aggregate capital externality, we show that the resulting shift in relative factor prices will, under certain conditions, lead to higher capital-intensity in the production technology and hence, a faster rate of technological progress. We provide historical evidence using European data to show that England was among the most urbanized and the highest wage countries at the onset of the industrial revolution. The model highlights the effects of changes in the availability of information, typical of a modernizing country, on efficiency wages and technological progress.

    Research areas

  • Anonymity, Commercialisation, Efficiency wages, Industrial revolution, Learning by doing

    Structured keywords

  • ECON Applied Economics

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  • Full-text PDF (accepted author manuscript)

    Rights statement: This is the author accepted manuscript (AAM). The final published version (version of record) is available online via Elsevier at https://www.sciencedirect.com/science/article/pii/S0304387816300451 . Please refer to any applicable terms of use of the publisher.

    Accepted author manuscript, 377 KB, PDF document

    Licence: CC BY-NC-ND

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