Department of Economics

The end of destitution: evidence from urban British working households 1904-1937

The Great Depression characterizes the 1930s as a period of persistent poverty as staple industries bombed and unemployment soared with devastating effects - particularly in the northern industrial towns and cities in the UK.  

Many of the accounts of working class living standards in 1930s Britain concentrate on the depressed towns of declining industries, in which unemployment was persistently high. Yet, elsewhere in Britain, and in households where the head was lucky enough to experience steady work, the experience might have been quite different. 

Summary

Authors: Professors Ian Gazeley and Andrew Newell

This study uses data to provide the first estimates of the change in the national incidence of absolute poverty among working households in urban Britain between 1904 and 1937.

The researchers analyse different poverty measures, investigate real wage growth and the possible impacts of changes to the system of wage bargaining system during WW1, as well as the falls in prices at the onset of the Great Depression, and the changes in household size.

Methodology

Two recently-digitized data sets are employed:

1)    household-level data from a Board of Trade survey taken in 1904

2)    part of a Ministry of Labour working class household survey from 1937

Since there is no data for households that are without work, the study cannot estimate poverty among households that are without work. These are excluded from the research, which may account for the variance between the findings of the study and prevailing views of living standards during the period.

Key Findings

The paper estimates the reduction, almost to elimination, of absolute poverty among working households in urban Britain between 1904 and 1937.

The two most important causes were:

  • the rise of about 30% in real wages between 1904–37
  • the reduction of one-third in the number of people in the average household over the same period.

Between them, these two changes imply a near doubling of the income per capita of an average household supported by a worker on the average wage. This implies that working households became substantially better off over the period and that ‘Rowntree-Bowley’ type destitution more or less disappeared, among working urban households at least, well before the establishment of the post-WW2 Welfare State.

Access the paper

Gazeley, Ian and Newell, Andrew (2012) The end of destitution: evidence from urban British working households 1904-1937. Oxford Economic Papers, 64 (1). pp. 80-102. ISSN 0030-7653