Publications:
Jensen, Martin Kaae, and Luo, Rui (2024) "The Plague, the Skill Premium and the Road to Modern Economic Growth" Macroeconomic Dynamics 1-33; (doi:10.1017/S1365100523000573)
(Abstract)When bubonic plague arrived in Britain in the mid-fourteenth century, it caused dramatic economic and structural change. Within fifty years, the skill-premium was reduced by half and another fifty years on, agriculture’s share of the labor force had declined by more than 20 percentage points. This paper develops a two-sector pre-industrial growth model and draws on recent data sources covering Late Medieval and Early Modern Britain to explain these and the ensuing developments. Our main findings are that the skill-premium’s decline was related to the guild and apprenticeship system, and that it and the other post-Plague adjustments were crucial determinants of the British trajectory towards industrialization. In particular, prior sectoral transformation and the skill-premium’s determination were important when the Early Modern population boom (1525-1654) threatened to reverse the adjustments caused by the Plague.
Keywords: Unified growth theory, skill-premium, physical-to-human capital ratio, sectoral transformation, pre-industrial economic development, long run economic history.
JEL Classification: O11, O41, N13, N33, J31.
Research in Progress:
"Government’s Pandemic-Specific Measures’ Impact on Optimal Monetary Policy"