This paper examines the issue of the Great Divergence by addressing the development of wages in the Indian subcontinent in the long run. We will argue that sixteenth and seventeenth century was generally a period of prosperity for this subcontinent. Prosperity which, apart some regional and chronological inconsistencies and discontinuities, is visible in the increase of both nominal and real wages. Whereas those stressed that the Great divergence in economic performance between Europe and other parts of the world started around 1800 (Pomeranz 2000; Parthasarathi 1998), recent scholarship has come to refute this idea, arguing that such divergence started in the early modern period (Broadberry & Gupta 2006). More recently, it has been argued that the Indian subcontinent has prospered until the late seventeenth century and that the divergence with other parts of the globe increased only from that moment on (De Zwart & Lucassen 2020). Yet, little is known about the origins of this prosperity further back in time. Some studies have been suggesting that sixteenth century India witnessed an increase in wages at least at a regional level (De Matos & Lucassen 2019; Carvalhal, De Matos, Lucassen 2021). By assembling a large dataset of wages from both Portuguese and Dutch sources, we will assess if this was true or if levels of growth do vary significantly through time and space. For the first time we will be able to construct a long term series of real wages from the early sixteenth century to the late seventeenth, capturing a crucial period in Indian economic history about which we still know very little. In order to achieve this objective, we will use the methodology of reconstruction of internationally comparable living standards, or welfare ratios, following the literature (Allen 2001; 2011). We will use prices and wages in order to reconstruct real wages for both European and non-European populations, thus enabling to evaluate welfare ratios for different population groups and establish long term comparisons both within and outside the sub-continent itself.

Fundação Calouste Gulbenkian

• História e Arqueologia - Humanidades