American Colonial Incomes, 1650-1774

46 Pages Posted: 25 Jan 2014

See all articles by Peter H. Lindert

Peter H. Lindert

University of California, Davis - Department of Economics; National Bureau of Economic Research (NBER)

Jeffrey G. Williamson

Harvard University - Department of Economics, Laird Bell Professor of Economics, Emeritus; Honorary Fellow, University of Wisconsin - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

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Date Written: January 2014

Abstract

New data now allow conjectures on the levels of real and nominal incomes in the thirteen American colonies. New England was the poorest region, and the South was the richest. Colonial per capita incomes rose only very slowly, and slowly for five reasons: productivity growth was slow; population in the low-income (but subsistence-plus) frontier grew much faster than that in the high-income coastal settlements; child dependency rates were high and probably even rising; the terms of trade was extremely volatile, presumably suppressing investment in export sectors; and the terms of trade rose very slowly, if at all, in the North, although faster in the South. All of this checked the growth of colony-wide per capita income after a 17th century boom. The American colonies led Great Britain in purchasing power per capita from 1700, and possibly from 1650, until 1774, even counting slaves in the population. That is, average purchasing power in America led Britain early, when Americans were British. The common view that American per capita income did not overtake that of Britain until the start of the 20th century appears to be off the mark by two centuries or longer.

Suggested Citation

Lindert, Peter H. and Williamson, Jeffrey G., American Colonial Incomes, 1650-1774 (January 2014). NBER Working Paper No. w19861, Available at SSRN: https://ssrn.com/abstract=2384313

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Jeffrey G. Williamson

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