Overcoming Disaster

In October 1347, a Genoese ship, sailing from Crimea and Asia, landed in Messina, Sicily. It carried with it rats infected with the bacteria Yersinia pestis, that was easily transmitted to humans via fleas.¹

Over the next five years, the Black Death plague would decimate Europe: at least 25 million or more than one third of the total population would succumb to the disease.² England, France, Italy, and Spain would each lose 50 - 60% of their populations.³

The disease was deadly. Infected individuals would typically succumb with 7 - 10 days and it had a fatality rate of 70 - 80%.⁴

Europe would not recover its population for over 200 years, and new plagues would continue to infect parts of Europe and elsewhere in the world.

But, the plague would also serve as a catalyst to help reshape Europe and create the foundations for growth that would see it pull ahead of the rest of the world.

It is worthwhile to examine how the Black Death led to these structural changes, and what we can take away for our modern society.

Economic Impact of Black Death

The immediate impact of the plague was a breakdown in the economies of Europe. Crops went unharvested; building and other projects ceased. Wages and per capita GDP declined across Europe from 1348 - 1350.⁵

Following the plague, a different economic story emerged. The new scarcity of labor meant that wages doubled in most countries; they did not return to their pre-plague levels until the 1500s the earliest, as populations recovered. Land rents and interest rates declined. Landowners lost, while laborers, peasants, and women benefited.⁶

This trend follows other research showing that massive shocks can reduce inequality. As it pertains to the Black Death, in the early 14th century the richest 10% in Europe controlled 65 - 70% of wealth; by 1450 this declined to around 50%.⁷

Increasing incomes among the laborers rippled through the economy. Demand for basic staples such as wheat declined and demand for more expensive gods such as meat, cheese, and barley increased; demand for barley related to growing appetite for beer. Agricultural output therefore shifted from cereals toward other crops, and there was a rise in sheep and cattle raising.⁸

The Black Death also caused new migration patterns. Cities which had experienced high mortality rates — and subsequently higher wages post plague — received migrants from rural areas seeking better opportunities. Cities that were well-connected to other cities with greater trade potential recovered more quickly. Certain rural areas were essentially abandoned and reforested.⁹

Europe’s Upward Trajectory

The Black Death shock also ushered in a series of structural changes to European economy and society that put it on an upward trajectory relative to the rest of the world, a phenomenon economists call the “Great Divergence.” Northwestern European states such as England and the Netherlands achieved faster growth and development post-plague than Eastern Europe, a phenomenon known as the “Little Divergence.”

Among the factors that contributed to the Great and Little Divergences, three stand out: weakening serfdom; strengthening human capital; and demographic changes.¹⁰

Weakening of Serfdom

In 1300 serfdom was widespread across Europe, as abundant labor reduced the negotiating leverage of workers. The population decline caused by the Black Death stressed this system.

In Western Europe, scarce workers used their newfound power to negotiate better working terms, which in turn hastened the decline of the system. However, in Eastern Europe, nobles — facing the same labor shortages — tightened controls and strengthened the legacy system.

In Western Europe, the dismantling of serfdom allowed greater consolidation of farms, which enabled owners to invest and increase productivity. The dissolving of the feudal system also allowed stronger sovereign states to emerge. These states introduced direct taxes to finance armies, versus relying on support from the nobles.

Again, in Eastern Europe this process was delayed as weaker states continued to rely on the nobles, perpetuating the pre-Black Death economic system.

Strengthening Human Capital

Increasing incomes among laborers following the Black Death enabled greater investment in human capital. For example, literacy rates in England rose in the years following the plague; per capital book production increased (even before the invention of the printing press in 1440), and the premium for skilled labor declined as more workers gained valuable new skills.

The primary mechanism by which laborers developed their craft was via guilds. The number of guilds in Europe increased following the plague.

The topic of guilds is controversial among historians: while they facilitate skill development and knowledge transfer, they are also monopolistic and place highly restrictive rules on where apprentices can work following their training.

The severe labor market dislocation resulting from the Black Death disrupted the guilds’ control, allowing apprentices greater freedom to work, which in turn may have enabled faster economic development.

The period following the Black Death saw a flurry of inventions: the printing press, firearms, bigger and more technologically advanced ships that required smaller crews, new forms of maritime insurance, stronger glass, and better paper.¹¹

Demographic Changes

The evolution from agriculture to cattle raising in many European economies had additional implications. Cattle raising — or pastoral farming — is a less physically intensive form of work, and so gave greater work opportunities to women.¹²

This change, along with overall labor scarcity, resulted in more female employment. Women’s wages increased, and many countries saw women marry later and fertility rates decline.

This demographic change slowed the rate of population growth. For example, England only returned to its pre-plague population two hundred years after Italy and Spain. This demographic change is one likely cause of its maintaining higher real wages.

Although elevated real wages were a temporary result of labor market dislocation, economists believe they were valuable in planting the seeds for more sustained growth, for example, by using the extra income to invest in new skills.¹³

Additionally, one economist’s model showed that temporarily higher wages led to increased demand for manufactured goods produced in cities, leading to greater rates of urbanization. In turn, greater rates of urbanization was one of the seeds that later enabled the Industrial Revolution.¹⁴

Takeaways

An immediate takeaway from the Black Death is that freedom and market forces were the best remedy for Europe to recover. Countries that increased labor market flexibility — through weakening the serfdom system and the control of the guilds — experienced the greatest gains. They saw higher real wages sustained for longer, greater consolidation of states, and more innovation.

But the broader takeaway is the remarkable perseverance and ingenuity of humans. The Black Death forced impossibly tragic circumstances on Europe and wrecked both populations and economies in its aftermath.

Nonetheless, societies eventually adapted and eventually thrived. Within a hundred years, the Gutenberg printing press would be invented, transforming the dissemination of knowledge. Leonardo da Vinci would be born in 1452, and Europe would be in the midst of its Renaissance. Michelangelo painted the Sistine Chapel in 1512.

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1  Cohn, Samuel K. Jr. "Epidemiology of the Black Death and Successive Waves of Plague." International Journal of Infectious Diseases 100 (2020): 102-113. https://pmc.ncbi.nlm.nih.gov/articles/PMC7513766/.

2  University of Iowa Libraries. Plague: History and Contemporary Analysis. Accessed February 3, 2025. https://hosted.lib.uiowa.edu/histmed/plague/.

3  Johnson, Noel D., and Mark Koyama. "The Ecological Origins of the Black Death." Working paper, Department of Economics, University of Colorado Boulder, May 19, 2020. Accessed February 3, 2025. https://www.colorado.edu/economics/sites/default/files/attached-files/johnson.pdf.

4  Jedwab, Rémi, and Noel D. Johnson. "The Economic Impact of the Black Death." Working paper, Institute for International Economic Policy, George Washington University, 2020. Accessed February 3, 2025. https://www2.gwu.edu/~iiep/assets/docs/papers/2020WP/JedwabIIEP2020-14.pdf.

5  Jedwab, Rémi, Noel D. Johnson, and Mark Koyama. "The Economic Impact of the Black Death." IIEP Working Paper 2020-14. Washington, DC: Institute for International Economic Policy, George Washington University, 2020. https://www2.gwu.edu/~iiep/assets/docs/papers/2020WP/JedwabIIEP2020-14.pdf.

6  Pamuk, Şevket. "The Black Death and the Origins of the 'Great Divergence' across Europe, 1300–1600." European Review of Economic History 11, no. 3 (2007): 289–317. https://ata.bogazici.edu.tr/sites/ata.boun.edu.tr/files/faculty/sevket.pamuk/pamuk_ereh_black_death.pdf.

7  Jedwab, Rémi, Noel D. Johnson, and Mark Koyama. "The Economic Impact of the Black Death." IIEP Working Paper 2020-14. Washington, DC: Institute for International Economic Policy, George Washington University, 2020. https://www2.gwu.edu/~iiep/assets/docs/papers/2020WP/JedwabIIEP2020-14.pdf.

8  Ibid.

9  Ibid.

10  Ibid.

11  Pamuk, Şevket. "The Black Death and the Origins of the 'Great Divergence' across Europe, 1300–1600." European Review of Economic History 11, no. 3 (2007): 289–317. https://ata.bogazici.edu.tr/sites/ata.boun.edu.tr/files/faculty/sevket.pamuk/pamuk_ereh_black_death.pdf.

12  Broadberry, Stephen. "The Black Death and Industrialisation: Lessons for Today’s South." VoxEU, Centre for Economic Policy Research (CEPR), June 8, 2020. https://cepr.org/voxeu/columns/black-death-and-industrialisation-lessons-todays-south.

13  Jedwab, Rémi, Noel D. Johnson, and Mark Koyama. "The Economic Impact of the Black Death." IIEP Working Paper 2020-14. Washington, DC: Institute for International Economic Policy, George Washington University, 2020. https://www2.gwu.edu/~iiep/assets/docs/papers/2020WP/JedwabIIEP2020-14.pdf.

14  Ibid.