Download report on proceedings of the historical national accounts group for

July 1996
REPORT ON PROCEEDINGS OF THE HISTORICAL NATIONAL ACCOUNTS
GROUP FOR IRELAND
Most countries of western Europe, except Ireland,1 have developed a complete
set of historical national accounts  even though in many of these countries the
underlying data are no better than in Ireland, at least from the 1840s onwards.
This gap hampers indigenous research on Irish economic history, and also
results in the neglect of Ireland in most comparative international studies of
historical economic development.
In order to advance work on Irish historical national accounts, a meeting was
convened at the ESRI on 29 June 1994 with a number of interested economic
historians in Ireland, North and South. There was unanimous agreement among
the participants to meet from time to time, and at least once a year, as an
informal Historical National Accounts Group (HNAG) to encourage work in this
area. It was also agreed to strengthen representation in the group.
At the succeeding meeting of HNAG in the ESRI on 27 January 1995 the
following papers were presented and discussed:
“Incomes in Ireland on the Eve of the Great Famine:
Viewing and
Reviewing the Evidence” by D. Johnson and L. Kennedy
“An Expenditure Estimate of Irish GNP (at Market Prices) in 1907” by
A. Bielenberg and P. O'Mahony
“Irish National Income in 1911 and its Context” by L. Cullen
“Preliminary Estimates of Agricultural Output in all Ireland and in the Irish
Free State Area in 1908 and 1918/19” by R. O'Connor and E. Henry
Revised versions of most of these papers were subsequently included in the
ESRI Working Paper Series, and copies of all papers are available from the
author of this report.
The next meeting of HNAG was held in the ESRI on 26 January 1996, at which
the following papers were presented and discussed:
“Report on the Database of Irish Historical Statistics 1911-1971” by
M. Dowling
“Examining
Ireland's
Post-Famine
Economic
Performance:
The
Distribution of Gross Domestic Product between the Countries of the
United Kingdom, 1861-1911” by F. Geary and T. Stark
“Estimates of Gross and Net Output and Income Arising in Agriculture in
all Ireland and in the Free State Area in Selected Years between 1900/01
and 1926/27” by R. O'Connor and E. Henry
“An Estimate of Irish Industrial Output in 1907” by A. Bielenberg
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“A Review of Industrial Output Measures in Ireland in the Inter-War Period:
Sectoral Comparisons of Real Product per Head 1935-38” by E. Birnie
The remainder of this report provides a short summary of each of the papers
presented at the January 1996 meeting, copies of which can be had from the
author of this report.
M. Dowling, “Report on the Database of Irish Historical Statistics 19111971”
The Database of Irish Historical Statistics 1911-1971 is a project funded by the
Economic and Social Research Council at the Department of Economic and
Social History of Queen's University Belfast. The project is designed to extend
and expand a database of Irish historical statistics covering the years 1821-1911
developed in the same Department. Dowling's paper describes the contents and
design of the new database.
The twentieth century extension of the nineteenth century database follows
closely the form and content of the latter, which includes a wide range of Irish
social statistics covering the whole of Ireland, North and South. The data are
divided into the following five categories:
Census of Population
Registrar General
Agricultural Statistics
Census of Industrial Production
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Trade Statistics
The remit of the project is to construct a relational database housed in INGRES
relational database software. The relational component of the unified database
1821-1971 is the spatial unit. The data in the nineteenth century database apply
to counties, baronies or poor law unions. In the twentieth century, the data apply
either to the county or the county district, both of which are historically and
geographically related to the spatial units of the nineteenth century database. In
addition the twentieth century database includes data recorded or published only
at an aggregate spatial level, such as the trade statistics of the Republic and
Northern Ireland.
The database will be held at Queen's University Belfast and at the ESRC Data
Archive at the University of Essex. The twentieth century database will contain
over 100 tables of data with accompanying documentation. A brief description of
the tables is given in the paper. The methods used for capturing, processing and
verifying the accuracy of the data are outlined, and an account is given of the
coding schemes used.
F. Geary and T. Stark
“Examining Ireland's Post-Famine Economic
Performance: The Distribution of Gross Domestic Product between the
Countries of the United Kingdom, 1861-1911”
This paper has three related objectives
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(i)
to outline a method for allocating existing estimates of GDP for the
United Kingdom as a whole across the four component countries,
England, Wales, Scotland and Ireland;
(ii)
to implement this method so as to provide GDP estimates for the
four countries for each of the Census of Population years from 1861-1911;
and
(iii)
to re-examine Ireland's post-Famine economic performance in the
light of these estimates.
Essentially the method outlined by the authors is to allocate UK GDP in each of
the three main sectors  agriculture, industry and services  on the basis of
each country's share of total sectoral employment, using sectoral wage
differences across the countries to adjust for sectoral productivity differences
among them. The possible biases that might arise from the application of this
technique are discussed, and it is argued that the direction of bias for Ireland is
unambiguous: the estimates are liable to understate, rather than overstate, the
level of Irish GDP.
The appropriate UK data used for allocation among the four countries are
Feinstein's estimate of GDP at constant (1900) factor cost. The authors describe
in detail the sectoral employment and wage data for each of the four countries
applied in the allocation of UK sectoral GDP. The resulting GDP estimate for
Ireland in 1911 turns out to be close to Louis Cullen's earlier estimate for that
year. The estimates suggest that Ireland's share of UK GDP fell from 11 per cent
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in 1861 to 6 per cent in 1911. Nevertheless, because Ireland's share of UK
population and employment fell far more over this period, Irish GDP per capita
and per worker rose relative to the UK  from 56 per cent to 66 per cent in the
case of GDP per capita, and from 57 per cent to 71 per cent in the case of GDP
per worker.
The new estimates are then used to examine three aspects of post-Famine
economic performance: (a) Ireland's growth performance relative to the other
home countries and in an international context; (b) the degree of convergence
among the four home countries; and (c) the sources of change in GDP and GDP
per worker. In regard to (a), the estimates suggest that the improvement in Irish
GDP per capita relative to the UK over the period 1861-1911 took place mainly in
the decade 1861-1871, and that after 1871 Ireland lost ground, relatively
speaking, to the advanced economies outside the UK.
The evidence of
convergence among the four home countries is mixed: while Ireland tended to
catch up on all of the other three, there is no evidence of long-term convergence
among the latter.
Finally, in regard to the sources of growth, the authors' results show that for the
UK as a whole, employment growth accounted for just under half of the growth in
GDP, with productivity accounting for slightly over 30 per cent. The situation in
Ireland was very different: because of the large fall in employment, productivity
growth accounted for more than the total growth in output. The authors examine
how much of the remarkable growth in Irish labour productivity can be ascribed to
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the fall in employment as distinct from capital accumulation and total factor
productivity growth.
Their results suggest that less than one-quarter of Irish
growth in labour productivity was due to falling employment, and more than threequarters to the effects of capital accumulation and total factor productivity growth.
The authors conclude, therefore, that emigration and the globalisation of labour
markets have little explanatory power in accounting for Ireland's post-Famine
growth in output and productivity, which must be ascribed to more traditional
explanations of capital accumulation and total factor productivity growth.
R. O'Connor and E. W. Henry, “Estimates of Gross and Net Output and
Income arising in Agriculture in all Ireland and in the Free State Area in
Selected Years between 1900/01 and 1926/27”2
The objective of this paper is to prepare agricultural output and income estimates
for all Ireland and for the Free State Area for 1900/01 and to compare these with
similar estimates prepared earlier for later years, 1908, 1912/13 and 1918/19,
and with the official estimates for 1926/27.
Special difficulties attached to
estimation of the 1900/01 figures, and in particular the absence of foreign trade
data for 1900 and 1901.
The authors describe in detail their sources and
methods of estimation.
The estimates show the value of gross output (including turf and changes in
livestock numbers) in all Ireland rising from £47.4 million in 1900/01 to £51.6
million in 1908, £59.3 million in 1912/13 and £141 million in 1918/19. For the
Free State Area, the comparable figures are £36.7 million, £40.5 million, £47.0
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million and £108.6 million, respectively. There were some significant differences
between the composition of output in the two areas. A very high proportion of the
total barley output was produced in the Free State Area, whereas the vast bulk of
the flax and grass seed output was produced in Northern Ireland. The potato
output in all Ireland was much higher than in the Free State Area, but this was not
because there was an unusually large production of potatoes in Northern Ireland.
Rather, a relatively large part of the potato production of Northern Ireland was
exported, and therefore treated as potato output, whereas in the Free State Area
a much greater proportion of potato production was fed to farm animals and
therefore shows up in livestock output.
Income arising in agriculture in all Ireland rose from £36.8 million in 1900/01 to
£40.2 million in 1908, £45.4 million in 1912/13 and £110 million in 1918/19. The
Free State Area proportion of total income arising was reasonably steady in the
region of 78-79 per cent of the total.
The authors also provide price estimates which enable volume indexes to be
derived. For all Ireland the volume of gross output (including turf and livestock
changes) to base 1900/01 = 100 was 101.4 in 1908, 109.2 in 1912/13 and 104.3
in 1918/19. In the Free State Area the volume of output rose somewhat more up
to 1912/13, but fell more during the First World War and in 1918/19 was only 3
per cent above the 1900/01 level. However, because prices rose throughout, and
dramatically so during the First World War, the current value of income arising
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was nearly three times higher in 1918/19 than in 1900/01 in both the Free State
Area and all Ireland.
A. Bielenberg, “An Estimate of Irish Industrial Output in 1907”
The 1907 Census of Production was the first official attempt to measure the
productive activity of the industrial sector of the United Kingdom.
The Act
authorising the collection of the data required that the figures for the three
divisions of the UK (England/Wales, Scotland and Ireland) be kept separate, so
that the Census yielded separate data for Ireland. According to the Census,
Ireland had 291,000 persons engaged in industry in 1907, and yielded 3.2 per
cent of the total UK net output.
The Census, however, did not provide a complete return since it omitted persons
working in smaller workshops on their own account, or people who only employed
their own family. Since Ireland was less industrialised, more persons worked in
smaller workshops or on their own account, so that it is probable that the Irish
returns understated productive activity to a greater extent than in the rest of the
UK.
The purpose of this paper is to use alternative data to adjust the Irish component
of the 1907 Census of Production so that it includes as far as possible all persons
who worked in the industrial sector. The main method of adjustment has been to
substitute the employment figures in the Census of Production with a new figure
derived from the occupational returns in the 1911 Census of Population. The
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new employment figure is then multiplied by an estimate of average net output
per worker, derived from the 1907 Census. In most cases a lower average net
output per head figure is used in order to allow for the lower levels of productivity
among industrial workers not included in the 1907 census.
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The revised figure for Irish industrial output in 1907 at £36.8 million is significantly
higher than the figure of £22.8 million produced by the official estimate. The
author considers that his estimate is probably a conservative one and that the
true figure may even be somewhat higher. The adjusted estimates suggest that
there were 544,000 persons engaged in Irish industry in 1907.
The largest
adjustments compared with the official figures occur in the clothing and building
trades, with the adjusted figure in both cases coming out more than three times
higher than the official estimate.
E. Birnie, A Review of Industrial Output Measures in Ireland in the Inter-War
Period: Sectoral Comparisons of Real Product Per Head 1935-38
This paper has two objectives: (i) to examine how far the available output-based
measures can be used to provide national income estimates for Ireland in the
1920s and 1930s which can be compared with UK data; and (ii) to use available
sectoral product estimates for the Republic, Northern Ireland and the UK to
provide measures of comparative sectoral productivity.
In regard to the first objective, the author concludes that it is only partly possible
to reconstruct Irish national accounts starting from measures of sectoral product.
He outlines the problems arising in using the industrial production censuses and
the agricultural surveys for this purpose. Comparisons between the Republic,
Northern Ireland and the UK are made difficult by differences in the timing of the
data and in the concepts and methods used.
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The author then goes on to adjust the available sectoral output data to make
comparisons of sectoral productivity in the three areas in the second half of the
1930s. The adjustments take account of differences between the Republic and
the UK with respect to product price levels. The relative unit prices estimated by
the author, known in the literature as unit value ratios (UVRs), point to the impact
of protectionism and the Economic War in allowing manufacturers in the Republic
to raise their prices, and in forcing farmers to lower the price of exports to the UK.
The results suggest that in every sector productivity levels in the Republic were
below the UK level, and in all but three sectors (construction, manufacturing and
mining and quarrying) stood at 70 per cent or less of the UK level. Comparing
Northern Ireland and the Republic, productivity levels were broadly similar in
construction, mining and quarrying and agriculture. The Republic had a clear
productivity
advantage
in
manufacturing,
but
this
may
have
been
counterbalanced by NI productivity advantage in electricity, gas and water.
Overall, the sectoral productivity results are consistent with a picture of a similarly
low level of total GDP per capita in the Republic and Northern Ireland in
comparison with the United Kingdom.
Kieran A. Kennedy
The Economic and Social Research Institute
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NOTES
1. An assessment of the extent and quality of historical national accounts for
Ireland is given in K. A. Kennedy, “Irish National Accounts for the 19th and 20th
Centuries”, Memorandum Series No. 187, Dublin: Economic and Social
Research Institute (1994) and K. A. Kennedy, “The National Accounts for Ireland
in the Nineteenth and Twentieth Centuries”, Scandinavian Economic History
Review, XLIII, 1 (1995), pp. 101-114.
2. This report is based on a revised version of the paper available as ESRI
Working Paper No. 77, June 1996.
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