King's College London

A new global study has redrawn the map of historical living standards by introducing climate-sensitive real wage estimates. 

By adjusting for the far higher heating, clothing and lighting costs faced by people in colder regions, and by identifying the cheapest viable diet in each year, the researchers find that from the 13th Century onward, some of European’s apparent early economic advantage was overstated.

That change significantly lowers historic real wage estimates for northern European cities such as London and Amsterdam, while leaving wages in warmer cities like Delhi or Mexico City largely unchanged.

The work fundamentally shifts long-standing narratives about when and where economic gaps between nations first opened.

Co-author, King's Dr Michail Moatsos said the existing literature risked misrepresenting regional differences by overlooking climate.

Drawing on evidence from 86 markets across Europe, Asia, Africa and the Americas, the authors argue that earlier comparisons of global wages have overlooked one crucial factor – the cross-country differences of the costs related to staying warm.

Their research, published in Economics and Human Biology, brings together the most extensive collection of historical wage and price data assembled to calculate real wages from the thirteenth to the mid-twentieth century. It also factors in the extra heating, clothing and lighting required in colder locations.

The approach also uses linear programming, a method that reconstructs the most affordable combination of goods that could sustain a worker at basic subsistence level. 

By adjusting for temperature differences as well as shifting patterns in food prices, they claim to offer the most comparable picture yet of living standards in pre-industrial societies.

Together, their findings suggest that global economic divergences were shaped not only by institutional and demographic forces but also by basic survival costs that standard historical methods had overlooked.

According to Dr Moatsos, the combined effect is substantial. “Once you incorporate climate and let the model choose the cheapest calories each year, several established narratives shift,” he said. “Some wage gaps open later, others become smaller, and in a few cases the ranking of cities changes entirely.”

For example, once such factors are taken into account, the “Little Divergence” between England, the Low Countries and the rest of Europe appears clearly only from the mid-eighteenth century, rather than the early 1600s, aligning the shift more closely with rising trade, agricultural change and early industrialisation.

The study also revisits what historians call the “Great Divergence” between Western Europe and Asia. While climate adjustments reduce the apparent lead of England over China and India, the gap remains evident by the early eighteenth century. That finding aligns with recent estimates of Chinese GDP that point to an earlier downturn relative to Europe.

Mexico City’s wages around 1700 emerge as remarkably high – on a par with, or slightly above, those in England and the North American colonies – before collapsing in the eighteenth century, widening the gap with the north. Peru shows a similar pattern but at much lower levels.

In Africa, where climate variation is smaller, overall wage patterns remain broadly unchanged.

“What we see is that the divergence was already there before many of our data series even begin,” said Dr Moatsos.

Dr Moatsos said research beyond Europe remains crucial.

“The global picture is still skewed because the surviving sources are,” he said. “If we want a genuinely global history of living standards, we need more evidence from Africa, Asia and Latin America. This study is a step, not the final word.”

Read more:

Real wages around the world: Insights from linear programming and accounting for climate differences Moatsos, M. & de Zwart,  2025 Economics and human biology. 59, 101544.