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Was the wage burden too heavy? Profitability and wage shares of settler agriculture in colonial Malawi, c 1900-1960

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Abstract
The historical role of European farming in southern and central Africa is a delicate matter that has received a great deal of attention among scholars over the years. Going through this vast literature a striking consensus emerges: success or failure of European farming in southern Africa was to a large extent depending on their access and control over labour. These propositions have so far never been systematically and empirically tested. This paper is an attempt to do that by analyzing the ‘wage-burden’ European settler farmers faced. The wage-burden is identified by measuring wage shares (total amount paid in the form of wages as a share of total profits) on European farms in colonial Africa. Based on archival documents we construct time-series for value of output, transportation costs, investments and wage shares for European tobacco and tea farms in colonial Malawi. Our estimates show that the wage burden decreased significantly after 1930s, i.e. the European farmers were able to capture a larger part of the rent over time. We argue that the developments cannot be explained by domestic colonial policies, but changes in regional migration patterns, which had a significant impact on the supply of farm labour.

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  • Bolt, Jutta & Green, Erik, 2014. "Was the wage burden too heavy? Profitability and wage shares of settler agriculture in colonial Malawi, c 1900-1960," Lund Papers in Economic History 134, Lund University, Department of Economic History.
    • Handle: RePEc:hhs:luekhi:0134
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    References listed on IDEAS

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    1. Sue Bowden & Blessing Chiripanhura & Paul Mosley, 2008. "Measuring and explaining poverty in six African countries: A long-period approach," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(8), pages 1049-1079.
    2. Frankema, Ewout, 2011. "Colonial taxation and government spending in British Africa, 1880-1940: Maximizing revenue or minimizing effort?," Explorations in Economic History, Elsevier, vol. 48(1), pages 136-149, January.
    3. Frankema, Ewout, 2010. "Raising revenue in the British empire, 1870–1940: how ‘extractive’ were colonial taxes?," Journal of Global History, Cambridge University Press, vol. 5(3), pages 447-477, November.
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    JEL classification:

    • N37 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Africa; Oceania
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • N95 - Economic History - - Regional and Urban History - - - Asia including Middle East

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