The end of destitution: evidence from urban British working households 1904-37

We estimate the reduction, almost to elimination, of absolute poverty among working households in urban Britain between 1904 and 1937. We exploit two recently-digitized data sets. The paper presents a statistical generalization, to working families in the whole of urban Britain, of the poverty decline found in the town studies by, amongst other, Bowley and Rowntree. We offer corroborative evidence and perform a simulated decomposition of the poverty reduction into its proximate causes. The two most important causes were the rise, 1904–37, of about 30% in real wages on the one hand and 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. We conclude with a discussion of deeper causes.