North America has always (since colonialism) been wealthier than Latin America

From a new paper by Robert Allen, Tommy Murphy, and Eric Schneider:

We begin by measuring real wages in North and South America between colonization and independence, and comparing them to Europe and Asia. We find that for much of the seventeenth and eighteenth centuries, North America was the most prosperous region of the world, offering living standards at least as high as those in the booming parts of North-Western Europe. Latin America, on the other hand, was much poorer and offered a standard of living like that in Spain and less prosperous parts of the world in general.

It is a common view that North America had to play catch-up, but the extensive data sets in this paper suggest that North American wages were up to twice as high as the general level of wages further south.

For the pointer I thank Mark Koyama on Twitter.


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