Wage forms, costs of living and the urban-rural wage gap: Southern Sweden, 1881-1930

One common finding of studies of industrialising economies in the nineteenth and twentieth centuries is the existence of an urban-rural nominal wage gap. For the analysis of its causes and context it is however essential to know the extent to which the gap is due to urban-rural differences in payments in kind, cost of living and consumption patterns. Only a few studies have tried to estimate the real urban-rural wage gap though. This paper belongs to this stream of literature, aiming to develop a method for the estimation of the real wage gap given the kind of data available in the Swedish context, and to use it to estimate the real wage gap for Malmo County in 1881-1930. The main result is that the gap is reduced to about one-half of its nominal size when differences in payments in kind, cost of living and consumption patterns are accounted for. The real wage gap was still substantial though, and the trend was increasing. While urban real wages were ranging from 10% less to 40% more than agrarian wages in the nineteenth century, urban real wages were 30-100% above agrarian wages in the 1920s.