This paper explores the long-run relationship between institutions and wage outcomes in Europe and its periphery. I find that cities that exercised stronger institutional protection of private property experienced: (i) higher levels of both skilled and unskilled real wages, as well as (ii) lower levels of inequality as measured by the skilled-unskilled wage ratio. While the first result corroborates existing work on the positive growth effects of better institutions, the second finding is more novel to the literature. Some explanations are proposed for how stronger institutions can cause an increase in the relative supply of skilled workers, thus lowering wage inequality.
European cities, Institutions, Wage inequality
Economics | Growth and Development | International Economics
Explorations in Economic History
Institutions, wages, and inequality: The case of Europe and its periphery (1500-1899). (2005). Explorations in Economic History. 42, (4), 547-566. Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/64
Copyright Owner and License
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.