|M.Sc Student||Abramov Arthur|
|Subject||Issues in the Economics of Florence in the Middle Ages|
|Department||Department of Industrial Engineering and Management||Supervisor||Dr. Benjamin Bental|
The Malthusian model provides an explanation to the development of economies before the Industrial Revolution. One of its implications is that real wages are negatively related to population size. The thesis investigates this implication applied to Middle-ages Florence.
The results obtained by the comparison the trend of population with real wages of either skilled or unskilled workers, create some "puzzles": from the end of the twenties of the fifteenth century, till the eighties, real wage are decreasing while the size of the population remains almost constant. Moreover, between 1400 and 1430, the population sharply decreased (by almost 40%), but gold-based real wages did not change. Both observations are inconsistent with the predictions of the Malthusian model.
The thesis argues that while the population remained stable, the size of the labor force did not. This discrepancy is due to the unequal impact plagues, that have struck the city approximately every decade, had on children and on adults. Specifically, the Black Death of 1348 has decimated the population to one half or two thirds of its original size, while plagues of the fifteenth century killed fewer people, mostly children (more than 70% of total losses). Accordingly, these plagues did not significantly change the size of the labor force in the city. Moreover, immigration from the rural areas around Florence to the city had increased the number of unskilled workers. Due to the openness of the city’s training system, the same workers eventually became skilled. This explains the decline in real wages.