Mats Olsson
Head of the Department of Economic History, Professor
Monopsony power and wages: Evidence from the introduction of serfdom in Denmark
Author
Summary, in English
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.
Department/s
- Department of Economic History
- Historical labour markets
Publishing year
2022-07-01
Language
English
Pages
2835-2872
Publication/Series
Economic Journal
Volume
132
Issue
648
Document type
Journal article
Publisher
Wiley-Blackwell
Topic
- Economic History
Keywords
- Wage Level and Structure
- Wage Differentials
- Monopsony
- Segmented Labor Markets
- Europe: Pre-1913
- Other Economic Systems
Status
Published
ISBN/ISSN/Other
- ISSN: 1468-0297