From The NEP-HIS Blog: Fifty Years of Growth in American Consumption, Income, and Wages

Fifty Years of Growth in American Consumption, Income, and Wages By Bruce Sacerdote (Darmouth) Abstract: Despite the large increase in U.S. income inequality, consumption for families at the 25th and 50th percentiles of income has grown steadily over the time period 1960-2015. The number of cars per household with below median income has doubled since […]

via Is the Glass Half Full?: Positivist Views on American Consumption — The NEP-HIS Blog

Ottoman stock returns during the Turco-Italian and Balkan Wars of 1910-1914

by Avni önder Hanedar (Dokuz Eylül University and Sakarya University, Turkey) and Elmas Yaldız Hanedar (Yeditepe University, Turkey)


Were the military conflicts of 19101914 related to higher risks for market investors at the İstanbul Stock Exchange? Wars are often perceived as bad news, correlated with increasing risks for investors and fluctuations in volatility: there would be fall in stock prices due to expected macroeconomic costs, such as higher inflation and lower production, as companies’ activities and expected returns decrease. On the other hand, if wars’ outcomes were perceived as unimportant for companies’ activities and expected returns, then there would be no significant changes in stock prices and volatility.

Many researchers on financial economics have created a large literature on the effects of different wars, and addressed mixed findings. A pioneering research for the political crises of 1880–1914 is Ferguson (2006), contributing to answering how did investors at the London Stock Exchange view the conflicts on the eve of the First World War. He showed the absence of higher war risk on bonds of Great Powers[1] traded on the London Stock Exchange. In addition, Hanedar et al. (2015) evince that the outbreak of the Turco-Italian and Balkan wars were correlated with a lower likelihood of Ottoman debt repayments, using data on two Ottoman government bonds traded on the İstanbul bourse. As the literature on the İstanbul bourse is limited, new light on this question required to explore risk perceived by stock investors due to the historical conflicts.

A column of Tanin presenting the value of bonds and stocks on 14 November 1910

We focus on the influence of stock returns at the İstanbul bourse during the Turco-Italian and Balkan wars, using unique data on stock prices of 9 popular domestic joint-stock companies in the Ottoman Empire. All these companies played a crucial role for the Ottoman economy and operated in the most attractive sectors, i.e. banking, mining, agriculture, and transportation. Some of them are the Ottoman General Insurance company (Osmanlı Sigorta Şirket-i Umûmiyesi), the Regie (Tobacco) company (Tütün Rejisi), and the Imperial Ottoman Bank (Bank-ı Osmanî-i Şâhâne). The data are manually collected from Tanin, which was a widely circulated daily Ottoman newspaper. This research is the first to provide a historical narrative explaining the changes of Ottoman stock returns due to the wars that took place on the eve of the First World War. It observes only small reactions to the Turco-Italian war, and only for three stocks out of ten examined (see Table 1). This is interesting, as previously (Hanedar et al., 2015) we observed higher responsiveness of government bond prices during the same period.



It would be possible to argue that investors might have believed that the war would not be that harmful for the non-governmental economic and financial sectors. An important aspect supporting the finding is that the companies were either established or supported by foreign investors. Great Powers protected their home countries’ investments both economically and politically. The companies obtained revenue guarantees and privileges from the Ottoman state, making the investors’ investments secure. Great Powers that invested in the Ottoman Empire were expecting its demise soon. Therefore, investors were likely to invest in the companies just for the sake of having territorial claim without much consideration of risk. During the nineteenth century, wars were important sources of the solvency problem, which could explain the sensitivity of government bond prices to the conflicts studied here.

The working paper can be downloaded here

References to this blog post here

[1] The UK, France, Germany, Italy, and Austria-Hungary.

From History&Policy – What does British imperial economic history tell us about the future of UK-EU trading relations?

by David Clayton, originally published on 25 April 2017 on History & Policy



Post-Brexit UK-European Union (EU) trading relations will take one of three forms:

(1) The UK will remain part of the EU customs union

(2) UK-EU trade will be governed by World Trade Organisation (WTO) rules

(3) The UK and EU will enter a free trade pact.

Option (1) is economically optimal but has been declared politically unfeasible because it requires the UK to commit to the free movement of labour between the EU and the UK. Such conditionality is essential because economies grow unevenly and, in the absence of independent currencies across Europe and/or a central European state to pool the risk of unemployment, free movement of labour is the mechanism for redistributing the gains from EU growth.

Economics (not history) is the best guide here.

Most parties agree that option (2) is the solution of last resort. Much has been made of its impact on complex cross-border trade in manufactured goods, but trade in services may be more problematic. The General Agreement on Trade in Services governs international trade, but can these rules handle disputes regarding trade in services across highly integrated economies subject to disintegration post-Brexit?

The law (not history) is the best guide here.

Britain’s economic history however is key to analysis of option (3).

Full article here:


Constructing Equality? Women’s wages, physical labor, and demand factors in Sweden 1550-1759

by Kathryn E. Gary, PhD candidate, Lund University


Women were important workers in the past, but they are still under-studied and their contributions largely absent from big-picture discussions of historical living standards. This is largely because women’s work remains to some extent a black box, but recent research has both challenged assumptions about how women participated in the paid labor market (c.f. Humphries and Sarasua 2012) and provided data about women’s payment for different kinds of labor (c.f. Humphries and Weisdorf 2015). The current work contributes to both these areas, by creating series of men’s and women’s wages in early modern Sweden, and by exploring both the mechanisms behind the gender gap in pay as well as the conditions under which women enter paid labor, with the goal of better understanding work in the past in general.

Primary data come from unskilled workers in the construction industry in Southern Sweden, predominantly from the towns Malmö and Kalmar; these are combined with published data from Stockholm, also from construction workers (Jansson, Andersson Palm, and Söderberg 1991). All data are for individuals paid by the day; relative wages are simply the percentage of men’s wages that women earn.


Figure 1 shows women’s relative wages from 1550 to 1759. Relative wages are high at the beginning of the period, around 80 percent, and increase to levels of parity in the early 17th century, after which they decline substantially, reaching as low as 40 percent during the end of the seventeenth century and into the eighteenth. This is a substantial decline over the period of not much more than a generation.
Some relative wage peaks are related to events that change both the demand for and supply of labor. Kalmar was a border town between Sweden and Denmark; from 1611 to 1613 the two countries fought the Kalmar War. Following these years women’s wages peaked, likely due to necessary rebuilding and a shortage in the supply of men. There is a wage spike in the same city following a fire in 1647 – while the national average weighs down the peak values, the deviations are still clear in the series, and when Kalmar is examined individually women’s relative wages peak as high as 1.33.


Table 1: Women’s work days as a percentage of all workdays in Kalmar, 1614-1710


Women’s ability to earn high wages goes against many of our theories about women’s earning potential – women are expected to earn less than men in physical tasks, because women are not as strong as men, and so are less productive physical laborers (Burnette 2008). Other theories suggest that women face constant wage discrimination (c.f. Bardsley 1999) – but this, too, is confounded by women’s ability to out-earn men, and by the large changes in the relative wage series. Something else is happening.

To understand we must look more closely at the data. In Kalmar workers are almost universally identifiable, allowing for deeper examination of the workforce. Table 1 shows the percentage of paid workdays that were worked by women, compared with the total number of paid work days in five year periods. Comparing the proportional feminization of the workforce with the amount of work, we see that the periods with the greatest amount of work are those in which the workforce is the most feminized – these periods are also those during which women’s relative wages are highest (see figure 1).

In combination with the relationship between total paid workdays and women’s relative wages across the whole country (figure 2), we are faced with a pattern that is familiar from the first and second world wars – when labor demand is high, women enter the labor force in higher numbers and are able to command higher wages. There is less evidence that women were systematically paid less either due to discrimination or because of their lower productivity – instead, women are responsive to economic forces, and especially to demand forces.

Figure 2: women’s relative wages and total paid workdays in Sweden, 1550-1759


It is simple to to extend our sense of what is ‘traditional’ deep into the past, and to apply broad categories of ‘men’s’ and ‘women’s’ work. However, when we are able to suspend our assumptions and dig deeper into the evidence, the data tell a less expected story; women in Sweden worked in physical occupations, alongside men, often for similar wages. They worked especially hard when the need was highest, and women’s wages only fell away from men’s when work became less regular and men and women weren’t employed together.

Accounting for women’s work shifts our understanding of household living standards in the long run, and provides strong evidence for what is intuitively clear: we cannot truly understand the past if we continue to discount the experiences or contribution of half the population.

The full working paper can be read here, and a shorter version from the EHS annual conference is available here.