Standard of Living

Between 1899 and 1929, deaths from waterborne diseases declined dramatically in American cities. The major cause of such declines was spending on sanitation systems (water, sewers, and refuse collection). Cities spent enormous amounts to build and maintain water and sewer systems, and to collect and dispose of refuse. We first estimate the size of the payoff to cities of such expenditures, where the payoff is measured in averted deaths. Using a panel of annual mortality and municipal expenditure data from 152 cities, we estimate that a 1% increase in sanitation expenditures was associated with a 3% decline in the mortality rate. In the second section of the paper, we ask whether the mortality reducing effects of sanitation expenditures differed by the type of water resources available to the city (ocean, lake, river). The answer is unambiguously yes, with cities located on lakes facing the most difficult sanitary situation.

African Americans have an excessive prevalence of hypertension relative to whites, particularly in the South. We seek to understand this puzzle by applying the developmental origins hypothesis to the rapid socioeconomic improvement that occurred after World War II. The long experience of pre-World War II poverty prepared African Americans born around the 1950s for survival in a lean world of poor nutrition and hard work, but created vulnerabilities for chronic diseases when conditions improved later in life. We analyze individual-level evidence from the CDC’s Behavioral Risk Factor Surveillance System with household income data, finding results consistent with the developmental origins hypothesis, that accelerated income growth from poverty strongly indicates an increased prevalence of hypertension. This strongly suggests that the collection of individual-level, intergenerational data is necessary to further evaluate this puzzle.

Using data from the Hampshire Friendly Society, a sickness insurance institution in southern England, we examine morbidity trends in England between 1870 and 1949. Morbidity prevalence increased between 1870 and around 1890, mainly because of a rise in the average duration of sickness episodes, but after 1890 average durations fell markedly even though the incidence of sickness rose. During the first two decades of the twentieth century, sickness prevalence increased gradually, but this rise was entirely due to the greatly increased duration of claims made by men aged 65 years and over. After the early 1920s, both the incidence and the average duration of sickness claims declined. These trends seem to be measuring ‘objective morbidity’: they vary closely with year-on-year changes in the mortality of men of working age, but do not show any clear relationship with real wages or unemployment. Our conclusions are different from those of earlier research using English sickness insurance data. We believe that one reason for this was a methodological problem with the analysis performed by nineteenth-century actuaries.

Since the 1880s, the Spanish government tried to promote social insurance to achieve political stability. However, a proper welfare state did not develop until the late 1970s. Weak fiscal capacity plus persistent disagreement on who should assume the financial cost of new social programs explain this delay. Before the Spanish Civil War (1936–1939), social reform advanced very slowly. Given the lack of fiscal capacity, Spanish policy makers initially promoted contributory social insurance schemes, mostly financed by employers’ and employees’ compulsory contributions with little public subsidy. To reduce social conflict, rural laborers were included in these programs along with industrial workers. This, however, generated strong business opposition from both rural landowners and small-sized, labor-intensive businesses (which predominated in Spain). With the advent of democracy in 1931, new social programs were devised, but redistribution demands focused on land reform, an ambitious and controversial policy that eventually led to the outbreak of the Spanish Civil War. After the war, the Franco dictatorship consolidated a conservative social insurance model. Social benefits were kept very low and funding relied on employers’ and employees’ compulsory contributions. The repression of the labor movement alongside trade protectionism allowed companies to easily transfer the cost of social insurance to wages and final prices. The introduction of income tax, after the restoration of democracy in 1977, led to a new social protection model. Tax-funded, noncontributory programs increased and social protection was extended beyond those in stable employment. Unlike in 1931, in 1977, the political consensus necessary to develop social policy was reached. In addition to economic modernization and population aging, decreasing inequality and the example set by the social pacts that spread throughout Europe after World War II must have been crucial in this sense.

This paper examines the effect of a sharp rise in mortality, the 1918 influenza epidemic, on life insurance holdings in the USA. The BLS Cost of Living Surveys of 1918–1919 provide a unique opportunity to examine the effect of the pandemic—some households were surveyed before, and others during or shortly after the worst of the influenza outbreak. In addition, I use state-level insurance sales data to compare the increase in spending on insurance in states particularly hard hit by the epidemic, relative to those that were not. I find some evidence that, in the immediate aftermath of the epidemic, those in severely affected areas spent more on industrial insurance. They were less likely, though, to hold ordinary or fraternal policies and the effects appear to be short-lived. I consider a few explanations for the smaller-than-expected results.

Immigrant indentured and transported convict servants had an incentive to breech their labor contracts by running away. Masters and servants in colonial Maryland engaged in strategic behaviors to deal with this contract breech incentive. In the seventeenth century, masters altered the colony’s statutory laws to deter and thwart servant escape, and servants chose the escape routes that offered the best chance of not being returned to Maryland. Strategic behaviors changed by the eighteenth century. Masters quickly advertised runaway servants in Maryland newspapers, and servants selected when to run that delayed the appearance of those ads as much as possible.

This essay asks two main questions. (1) How did Rhode Island town leaders use adult guardianship during the turmoil of the Revolutionary Era? (2) What factors explain each town’s use of adult guardianships? Every town elected six councilmen each year to take care of local problems; these leaders had authority to enact discretionary guardianships to restrain and protect propertied adults whose behavior had caused complaint. Our analysis of data from 14 Rhode Island towns shows that town councilmen overall increased their use of adult guardianships significantly between 1750 and 1800. Guardianships declined during the height of warfare (1775–1781) but increased significantly after the war. Hopkinton showed the greatest use of this legal process and Providence the lowest. We found no significant correlation between a town’s use of adult guardianship and that same town’s population, wealth, or geographic region. The common factor appears to be the stress and disorder of the era. We investigated Hopkinton more closely and found that the town councilmen in this newest Rhode Island town put adults under guardianship in heavy-handed ways, especially in the 1780s and 1790s, often bypassing less intrusive and punitive solutions. The Hopkinton councilmen, we conclude, went to an extreme in using adult guardianship, but their actions were part of a widespread effort by Rhode Island town leaders to restore order in their communities after the Revolutionary War.

I analyze the intrahousehold allocation of resources among nineteenth-century industrial families. The narrative record and economic theory suggest that we should find allocation differences by gender. Using a large survey of industrial households in the late nineteenth century, I find no evidence of gender bias in household allocations to children, nor can I reject the hypothesis that allocations were efficient. These findings cannot be explained by parental egalitarianism. I find that parents were strategic out of necessity—the future cooperation of children was unknown and highly uncertain, tempering any desire for gender bias in household allocations. Narrative and quantitative evidence supports this conclusion.

The chapter provides a historical survey of child labor in early republican Turkey. Capitalist development and class differences were the two main factors that shaped child labor. Evaluating the Turkish experience of child labor within a broader, international context, the present study argues that capitalist development had an overall adverse effect on working-class children despite the official rhetoric that the nation owed to its children the best that it had to give. The emphasis on the problems of child labor in public speeches and several legal changes notwithstanding, political elites took no comprehensive step to ameliorate the socioeconomic conditions of child laborers.

The New Testament describes “religion that is pure and undefiled” as consisting of “care for orphans and widows in their distress.” This essay surveys the demography of orphans and widows in the Greco-Roman world and considers how the economic ramifications of these realities in early Christian communities can help interpreters make sense of otherwise opaque biblical texts.

The Shakers were a religious society well known for their commitments to celibacy, pacifism, joint ownership of property, and communal lifestyle. John E. Murray wrote the first economic analysis of the Shakers in his Ph.D. dissertation in 1992. Proposing that Shaker membership and prospective entrants responded to the incentives created by the difference between Shaker and worldly living standards, he developed a model of community formation and faith requirements, quality of life, and entry and exit behavior. He tested the implications of the model by using demographic, epidemiologic, anthropometric, and economic data recovered from Shaker manuscripts. He went on to write a series of articles, some coauthored by Metin Coşgel, which examined various aspects of the Shaker lifestyle and business organization. These articles showed that membership decisions within Shaker communal societies were influenced by both religious belief and economic incentives; despite communalism, Shaker farms and shops generally performed just as productively as their neighbors; the organization of Shaker communes under the Family system was a compromise that balanced communal ideals with the costs of motivation and coordination; eastern and western Shakers farmed in ways that were more similar to their neighbors than to each other; and Shakers’ dairy operations were just as productive as nearby family farms or larger commercial operations. This essay examines these topics in a coherent manner with the dual objective of discussing Murray’s contributions to the literature and uncovering the basic elements of an economic approach to understanding the behavior, organization, and relative performance of the Shakers.

We document the religious diversity of the German principality of Hesse-Cassel in the mid-nineteenth century. Over 63% of the villages and towns were majority Protestant, and 13% were majority Catholic. Only 23% of Hessian villages and towns, however, were home to Jews, who typically made up less than 10% of the inhabitants in these places. Still, we find that Jews made up 2.6% of the principality, a larger percentage than has been estimated for Germany as a whole at this time. Our maps show the principality’s extraordinary variety in the different principal Christian denominations, the Jewish population, and minority Christian enclaves. Protestant-majority communities were spread across most districts, as were communities with any Jews. Catholic-majority communities were clustered in two districts, while Christian minorities could only be found in Protestant-majority localities. Meaningful differences in the socioeconomic characteristics of communities existed, with majority-Protestant places a bit more urban than majority-Catholic ones and places with Jews the most urban. We document the occupations of the Jewish population, finding many traders, consistent with the literature, but a surprisingly large number of farmers and fewer moneylenders than might be expected. Hessians were segregated to a large degree by religion, and this was related to various economic, social, and demographic outcomes.

European coal production underwent a period of dramatic increase from the early nineteenth century to 1913. A consensus exists, however, for a depiction of the coal industry as, to a high degree, technologically stagnant throughout the long nineteenth century. Macro-inventions, or general-purpose technologies, in fact, appeared at either end of the period. Steam power to drive water pumps and shaft elevators was introduced in the eighteenth century, while the application of mechanical power to different tasks and the electrification of mines were advances that became pervasive in the twentieth century. In the interregnum, therefore, the increase in European coal production would have mainly been the result of adding more labor rather than developing new technology. This paper aims to revise this interpretation. First, long-term series of labor productivity and fatality rates data are presented for the four main coal-producing European nations, Great Britain, Belgium, France, and Germany. Second, a link between improvements in Europe both in productivity and safety in conjunction with a series of “small-scale” technological innovations is proposed. These technologies, which emerged and diffused to affect different aspects of mining production, did not involve huge investments in labor-replacing capital. They were, for the most part, complementary to labor and closely related to questions of safety. A comparison of both estimates, labor productivity and safety, for the European countries is also established with those of the United States, a latecomer to the exploitation of coal resources.

This paper assesses the degree of integration of grain markets in late-Bourbon New Spain using standard econometric tools applied in other international cases. I find that grain market integration in Bourbon Mexico attained a degree comparable to other regions in the world, despite its poor transportation technology. Bourbon Mexico was not a market economy, but markets were effective tools in funneling resources from the countryside to the cities. An increase in prices in a leading market increased prices throughout the viceroyalty. For example, maize prices in Antequera, in the southern region of Oaxaca, within a year absorbed changes in prices in markets as distant as Guadalajara or San Luis Potosí (800 km). Likewise, wheat prices in Mexico City reacted to changes in the flour markets of the Gulf, such as Campeche (900 km away). These findings place grain markets in New Spain at a level of performance that is comparable to that found in the United States and some European regions. Spatial arbitrage (the buying in high-price regions and selling in low-price regions) was a driving force that broke local monopolies, opened the participation to other actors and created more diversified and integrated grain markets.

President William McKinley’s decision to go to war with Spain in 1898 is not well understood. Since McKinley kept very few written records, little is known about his actual thought process. As a result, historians have struggled with the apparent inconsistency between McKinley’s initial commitment to peace and subsequent decision to go to war and tend to focus on identifying outside forces that can explain the reversal. In this paper, I develop a model of optimal reneging. Contrary to conventional narratives among historians that McKinley’s decision to go to war was inconsistent with his earlier position, my model suggests that McKinley’s decision can be understood as an optimal timing problem. I start with the premise that a country would prefer to enter conflict only when its military capability is sufficient to make a victory likely. Thus, a country will commit to peace until its military capability reaches some threshold. Once military capability reaches this threshold, it is optimal to renege on a commitment to peace. I conduct simulations of the model to determine the likelihood that McKinley would renege during his first term. I find that if the ex ante estimate of the benefits of war was 2–2.6 times the ex ante estimate of cost, then the probability of reneging after one year is approximately 1–18%. If the perceived benefits were 2.7 times the ex ante estimate of cost (or greater), entry during McKinley’s first term is certain.

The contemporary debate over the morality of capitalism would benefit from attention to eighteenth-century philosophical arguments for and against commercial life. Well before Karl Marx, Jean-Jacques Rousseau condemned the emerging commercial society as incompatible with equality, freedom, and virtue. And well before Milton Friedman, Adam Smith defended commerce as a system of natural liberty that indeed fostered considerable inequality but only in the course of dramatically improving the condition of the poor. Smith shared many of Rousseau’s concerns about the negative effects of commerce and directly addressed them in his major works. Smith concluded that the benefits of commercial life outweighed the risks and contributed substantially to human progress—a possibility Rousseau vigorously denied.