Origins of Europe’s North-South Divide: Population changes, real wages and the “Little Divergence” in Early Modern Europe

In this paper I investigate the “little divergence” in late medieval and early modern Europe, focusing on the long run response of real wages to demographic changes. Through a quantitative analysis of the 14th-18th centuries series of real wages and population shocks in fourteen European cities, I find that in the northwestern regions the urban real wages were detached from population before the Industrial Revolution, while, in the central and southern regions wages had a moderate or negative response to population changes. In addition, I show that this different response dates back to the 14th-16th centuries. Finally, I claim, that these two results support three possibly non alternative interpretations of the “little divergence”, either based on changes of fertility regimes, rural and urban labor organizations, or on the onset, in early modern northwestern Europe, of non strictly Malthusian growth mechanisms.