GGDC Research Memorandum Nr. 113

Title: Comparing Productivity in the Netherlands, France, UK and US, ca. 1910: A new PPP benchmark and its implications for changing economic leadership

Author(s): Ewout Frankema , Jan-Pieter Smits and Pieter Woltjer

Abstract: This paper presents a new benchmark of output and relative prices (PPPs) for agriculture, mining and five manufacturing branches in the US, UK, France and the Netherlands around 1910. The Fisher-weighted PPPs are constructed according to the industry-of-origin approach in order to assess comparative levels of output per worker. The sectoral estimates are subsequently used to build up a comparison of output per worker and per head at the total economy level. Our main findings are that the levels of labour productivity and per capita GDP in the Western European countries relative to the US have been overestimated in the literature so far. Backward projection into the nineteenth century sheds new light on the timing of the take-over in productivity and income leadership between the Netherlands, UK and US. In terms of GDP per capita, the US took over the UK between 1879 and 1899, while in terms of labour productivity the US was already world leader around 1850. Also the Dutch economy seems to have lost its economic leadership earlier than hitherto has been assumed.

Date: January 2010 | Full Text | Appendices B, C1, C2, C3