Inequality and the working class in Scandinavia 1800–1910: Workers’ share of growing incomes

One of the major ways in which economic inequality can increase is when the development of wages of ordinary workers trail productivity and GDP growth, meaning that the increasing riches fall in the hand of other social groups (top employees, owners of land and capital). This paper investigates the relationship between wages and GDP in Denmark, Norway and Sweden from 1800 to 1910, using wage series for workers in agriculture as well as crafts and industry. It shows wages trailing GDP from the 1840s to the mid-1870s, with a particularly pronounced such trend in Norway. On the other hand, wages generally increase at the same pace as GDP in the 1870s, 1880s and 1890s. The early 1870s is a break point also for food real wages which start increasing at that point. Four explanations for the varying fortunes of workers are tested: price developments, population growth, emigration, and institutional changes. Variations in labour supply, stemming from population growth and emigration, are shown to be the most important determinant.