The plague, the skill-premium, and the road to modern economic growth

Martin Kaae Jensen, Rui Luo

Research output: Journal PublicationArticlepeer-review


When bubonic plague arrived in Britain in the mid-14th century, it caused dramatic economic and structural change. Within 50 years, the skill-premium was reduced by half, and another 50 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 toward 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.

Original languageEnglish
JournalMacroeconomic Dynamics
Publication statusPublished - 12 Feb 2024


  • Keywords:
  • long-run economic history
  • physical-to-human capital ratio
  • pre-industrial economic development
  • sectoral transformation
  • skill-premium
  • Unified growth theory

ASJC Scopus subject areas

  • Economics and Econometrics


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