Monopsony Power and Wages: Evidence from the Introduction of Serfdom in Denmark

Kathryn Gary, Peter Sandholt Jensen*, Mats Olsson, Cristina Victoria Radu, Battista Severgnini, Paul Sharp

*Corresponding author af dette arbejde

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Abstrakt

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.
OriginalsprogEngelsk
TidsskriftThe Economic Journal
Vol/bind132
Udgave nummer648
Sider (fra-til)2835–2872
Antal sider38
ISSN0013-0133
DOI
StatusUdgivet - nov. 2022

Bibliografisk note

Epub ahead of print. Published online: 1 July 2022.

Emneord

  • Coercion
  • Labour mobility
  • Monopsony
  • Serfdom

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