Working Paper: NBER ID: w19861
Authors: Peter H. Lindert; Jeffrey G. Williamson
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.
Keywords: Colonial America; Income Levels; Economic History; Inequality
JEL Codes: N11; N31; O47; O51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| colonial economic conditions (F54) | income levels (J31) |
| regional economic activities (R11) | income distribution (D31) |
| slave population increase (J47) | rising inequality (D31) |
| income per capita growth (O49) | average incomes (D31) |
| southern colonies (N51) | relative income per capita (D31) |