Wages of Men, Women, and All the Others: Comparisons of the Standard of Living Based on Welfare Ratios Must Consider Household Complexity

Abstract Wages earned by men are often used as an indicator of the material standard of living (MSoL). However, this indicator relies on several assumptions when used for comparisons across time and space. Considering these assumptions will improve estimates of the MSoL from wages. One necessary assumption is that households in the compared populations relied on the primary income of the male head of household to a comparable degree. I demonstrate that the degree of reliance on the male income was closely associated with the complexity of households within the population. Nuclear households – typical of English-speaking countries – were more reliant on the male income than more complex households found elsewhere. Consequently, estimates based on male wages are less accurate for populations with complex households, likely underestimating their MSoL. While the complexity of households in historical populations is seldom known, it can be predicted using demographic and economic indicators. I conclude that populations at similar stages of industrialization and the demographic transition are the most comparable when using male wages to estimate their MSoL. Further, I use a reductive model to show that a household’s MSoL is determined by the following three factors: time spent on productive work, the market wage for men, and the female/male (F/M) wage ratio. My analysis shows that including the F/M wage ratio does not change the ranking of the MSoL based on male wages. Nonetheless, I argue that there are compelling reasons to expect the wage ratio to be a useful addition when comparing the MSoL of historical populations.