The standard of living in ancient societies: a comparison between the Han Empire, the Roman Empire, and Babylonia

In recent years interest in welfare levels in ancient economies has increased considerably partly as a result of a quest to find the start of modern economic growth. These welfare levels can be calculated in two ways. First, it can be done using GDP per capita, capturing average income in a society. However, this tells us little about actual welfare of people at the bottom of the income distribution. Therefore, recently the focus has shifted towards so-called welfare ratios where the wage of an unskilled labourer is compared with the price of a basket of goods. In this paper we present new estimates for Han China and Babylonia as well as modifying existing estimates for Egypt and the Roman Empire to make them comparable. We find that the agricultural regions of Egypt and Babylonia had the lowest welfare ratios. Since in all societies unskilled workers in antiquity belonged to the bottom 80% of the income distribution, these figures are comparable. This only changed in the 14th century when in some Northwestern European countries the relative position of labourers in the income distribution deteriorated even though their welfare ratio’s increased marking a start of the Great Divergence.