Monopsony power and wages: Evidence from the introduction of serfdom in Denmark
(2022) In Economic Journal 132(648). p.2835-2872- Abstract
- We exploit a large historical shock to the Danish labour market to provide evidence of how restrictions on labour mobility increase monopsony power and thereby reduce wages. By severely limiting the possibility of the rural population to work beyond their place of birth, the reintroduction of serfdom in 1733 aimed to increase monopsony power and secure cheaper labour in the countryside. Using a unique data source based on the archives of estates from the eighteenth century, we test whether serfdom affected the wages of farmhands more strongly than other groups in the labour market, and results based on a difference-in-differences approach reveal evidence consistent with a strong negative effect following its introduction. This is confirmed... (More)
- We exploit a large historical shock to the Danish labour market to provide evidence of how restrictions on labour mobility increase monopsony power and thereby reduce wages. By severely limiting the possibility of the rural population to work beyond their place of birth, the reintroduction of serfdom in 1733 aimed to increase monopsony power and secure cheaper labour in the countryside. Using a unique data source based on the archives of estates from the eighteenth century, we test whether serfdom affected the wages of farmhands more strongly than other groups in the labour market, and results based on a difference-in-differences approach reveal evidence consistent with a strong negative effect following its introduction. This is confirmed when we use a different control group from the Swedish province of Scania. We also investigate whether one mechanism was that boys with rural backgrounds were prevented from taking up apprenticeships in towns and find suggestive evidence that this was indeed the case. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/f6ec5083-9705-4052-81e4-37e5b4c2908f
- author
- Gary, Kathryn LU ; Sandholt Jensen, Peter ; Olsson, Mats LU ; Radu, Cristina Victoria ; Severgnini, Battista and Sharp, Paul
- organization
- publishing date
- 2022-07-01
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Wage Level and Structure, Wage Differentials, Monopsony, Segmented Labor Markets, Europe: Pre-1913, Other Economic Systems
- in
- Economic Journal
- volume
- 132
- issue
- 648
- pages
- 2835 - 2872
- publisher
- Wiley-Blackwell
- external identifiers
-
- scopus:85145302937
- ISSN
- 1468-0297
- DOI
- 10.1093/ej/ueac037
- language
- English
- LU publication?
- yes
- id
- f6ec5083-9705-4052-81e4-37e5b4c2908f
- date added to LUP
- 2022-04-06 13:09:55
- date last changed
- 2023-01-16 16:48:58
@article{f6ec5083-9705-4052-81e4-37e5b4c2908f, abstract = {{We exploit a large historical shock to the Danish labour market to provide evidence of how restrictions on labour mobility increase monopsony power and thereby reduce wages. By severely limiting the possibility of the rural population to work beyond their place of birth, the reintroduction of serfdom in 1733 aimed to increase monopsony power and secure cheaper labour in the countryside. Using a unique data source based on the archives of estates from the eighteenth century, we test whether serfdom affected the wages of farmhands more strongly than other groups in the labour market, and results based on a difference-in-differences approach reveal evidence consistent with a strong negative effect following its introduction. This is confirmed when we use a different control group from the Swedish province of Scania. We also investigate whether one mechanism was that boys with rural backgrounds were prevented from taking up apprenticeships in towns and find suggestive evidence that this was indeed the case.}}, author = {{Gary, Kathryn and Sandholt Jensen, Peter and Olsson, Mats and Radu, Cristina Victoria and Severgnini, Battista and Sharp, Paul}}, issn = {{1468-0297}}, keywords = {{Wage Level and Structure; Wage Differentials; Monopsony; Segmented Labor Markets; Europe: Pre-1913; Other Economic Systems}}, language = {{eng}}, month = {{07}}, number = {{648}}, pages = {{2835--2872}}, publisher = {{Wiley-Blackwell}}, series = {{Economic Journal}}, title = {{Monopsony power and wages: Evidence from the introduction of serfdom in Denmark}}, url = {{http://dx.doi.org/10.1093/ej/ueac037}}, doi = {{10.1093/ej/ueac037}}, volume = {{132}}, year = {{2022}}, }