The Equally “Bad” French and English Farmers of Quebec: New TFP Measures from the 1831 Census

I have had many iterations of this paper. Each time a draft was made, we cut it down to answer fewer questions. The more we worked on it, the more we realized that the endeavor to explain agricultural productivity differences and the agricultural crisis of Canada from 1800 to 1850 required numerous separate papers. As a result, we opted to cut down this paper to only one question: were French-Canadian farmers “worse” than English-Canadian farmers at the height of the agricultural crisis (1831). Our answer is that, no they were not.

The paper can be consulted here on Academia. It has an extensive appendix on our data computations and our control variables. To our knowledge, it is the first that such an exhaustive empirical strategy has been used for early Canadian history. The key table can be seen here below and confirm that the differences in TFP are minimal.

TFPCanada

 

New Paper: Living Standards in Canada, 1831

I have a new paper regarding the measurement of living standards in Lower Canada (modern-day Quebec) in 1831. I use the census of 1831 which is rich in that it offers a wide cross-sectional of wages and prices across the colony. We found that Canadians were substantially poorer than the Americans in Boston and Philadelphia and that within the colony, there were wide variations in living standards. The paper can be found at Academia.edu.  Below, you will also find the map of our results for Quebec, a table of the distribution of wages and the comparison with the United States. 12874460_10153341659956507_1736134920_o

Wages in Canada

WagesCanadaUSA

Unemployment in Canada after recessions: the 1920s versus the 2000s

While doing research on other issues, I found an easily compilable dataset of unemployment rates for trades on a monthly basis in Canada with provincial breakdowns. This gave me the idea to see how the different regions of Canada dealt with recessions with regards to unemployment.

The graph below is a very simple coefficient of variation of unemployment rates across provinces. They represent the months of December 1918 to December 1924 (in red) and the months of December 2007 to December 2013 (in blue). The data for the 1920s is of lesser quality than the data for the late 2000s and early 2010s, but still it gives a good idea of how recessions are “shared” in Canada.  In the 1920s, we can clearly see that the recession was felt more deeply in some regions than others. This is less the case in our days. However, the 1920s recession  was one where aggregate supply shocks provided a strong explanation (see here). Still, the difference is marked and it indicates that recessions in Canada are now more “well shared” than was the case in the 1920s.  It indicates also the provincial economies of Canada are now better integrated than was the case in the 1920s (this is a topic of debate in the literature).

SharedRecessions

In a few weeks, I will post data comparing the same things but with the 1930s Great Depression.

 

Economic Growth: America vs New France in the colonial era (1700-1750)

As some of you might have glanced, I am also using this blog to hone some of my research by sharing some elements of it with the greater public. It also allows me to reflect appropriately on some issues relating to the economic history of Canada. In that regard, I always felt that little benchmarking of economic performance between the Canadian colonies and the American states (up until Confederation in 1867) which impoverished any analysis of the economic path followed by North American economies (and whether or not America was really “exceptional”).

To answer part of that question, at least during the colonial era (circa 1700 to circa 1760), I decided to recreate a better data set of GDP per capita in New France. There was already a dataset produced by Morris Altman in the William and Mary Quarterly in the late 1980s. However, that dataset used fixed prices of 1749. In short, all measures of production were multiplied by the prices observed in 1749 which assumes that prices did not fluctuate much. As I pointed out in this working paper, prices were very volatile and that assumption undermines the quality of Altman’s pioneering efforts (which were made when computers were … well… dinosaurs). Moreover, most assumption use fixed quantities over time. The most problematic of which was to assume that workers in agriculture were exclusively agricultural – a very dubious hypothesis. Hence, I thought that using estimates of the labour requirements of an acre of land  plowed or pastured (Craig Muldrew estimates this at 18.5 days in late 18th century England) would give me the share of potential labour inputs free for non-agricultural purposes. Afterwars, this share needs simply to be multiplied by nominal wages. Hence, it captures total income better and considers the effects of relative price changes between hinterland goods and urban goods.

Since I collected new data about prices and wages from the Archives of the Séminaire de Québec and the Archives of the Ursulines de Québec, I felt like I could improve on the work of Altman and produce new estimates of GDP per capita in New France. Here are the results. They show that New France had a constant decline in real per capita output from 1706 to 1719 – years of war and inflation (as a result of the colonial administration’s decision to issue money on playing cards). Afterwards, the economy seems to adapt. This seems consistent with real business cycle theory: there was a shock on productivity as a result of war and inflation. Once the war ended and the administration stopped its monetary experiments, growth recovered to the pre-war level. However, it did not increase from 1720 to 1739.

NewFranceGDP

Overall, the time trend shows that New France’s per capita income grew at 0.13% per annum from 1706 to 1739. This pitiful growth rate is dominated by the effects of the recovery after real shocks (war and inflation – 1706 to 1719 and the harvest failure of 1737). Compared to the trend observed in the American colonies, Quebec was a poor performer. Estimates of growth show figures variating between 0.3% and 0.6% per annum (here, here and here and also here) for the period from circa 1700 to circa 1750.

There is another damning piece of evidence for the economic performance in the pre-british era : agricultural productivity. The value of what was produced per acre of worked (cultivated and meadow) land declined constantly. On this basis, the trend is minus  0.49% per annum, most of this productivity decline happened after 1720. In short, farmers in New France only decided to increase their use of inputs which increasing the efficiency per usage. In fact, they sacrified productivity for production. They worked the land industriously to increase their income. As long as land was available, this could sustain a stable standard of living, but eventually, declining marginal returns would have kicked in and the economy would have begun to contract.

So, here is a short summary of what I am trying to say

  1. American economic growth has not been adequately benchmarked to other similar economies
  2. New France’s economic performance is a good benchmark for the US’s economic performance
  3. The estimates available for New France should be improved and updated
  4. New France’s economic growth per capita stood at 0.13% per annum and more or less stagnated from 1720 to 1739
  5. Compared to New France, economic growth in the American colonies was exceptional
  6. All the growth observed in New France is the result of a more extensive use of inputs rather than a more efficient one. A situation bound to generate economic contraction in the long run.