Why was England first? And why Europe?
We present a probabilistic model that builds on big-push models by Murphy, Shleifer and Vishny (1989), combined with hierarchical preferences. Exogenous demographic factors (in particular the English low-pressure variant of the European marriage pattern) and redistributive institutions – such as the Old Poor Law – combined to make an Industrial Revolution more likely. Industrialization was the result of having a critical mass of consumers that is “rich enough” to afford (potentially) mass-produced goods. Our model is calibrated to match the main characteristics of the English economy in 1780 and the observed transition until 1850. This allows us to address explicitly one of the key features of the British Industrial Revolution unearthed by economic historians over the last three decades – the slowness of productivity and output change. In our calibration, we find that the probability of Britain industrializing before France and Belgium is above 90 percent. Contrary to recent claims in the literature, 18th century China had only a minimal chance to industrialize at all.
