The Swedish wage-rental ratio and its determinants, 1877-1926

Abstract

Trends in wage-rental ratios figure prominently in the recent literature on factor price convergence and globalisation in the late nineteenth century. Sweden has been described as a free-trade country whose wage-rental ratio exhibited a distinctive upward trend before World War I. This article presents a new land price series that indicates an increase in land rentals and an evolution of the wage-rental ratio more in line with other European protectionist countries. We explore the determinants of the Swedish wage-rental ratio and assess the relative importance of protectionism and changes in Swedish farming's product mix from crop to animal products. © Blackwell Publishing Asia Pty Ltd and the Economic History Society of Australia and New Zealand 2007.