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 for this work

Research output: Contribution to journalJournal articleResearchpeer-review


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.
Original languageEnglish
JournalThe Economic Journal
Issue number648
Pages (from-to)2835–2872
Number of pages38
Publication statusPublished - Nov 2022

Bibliographical note

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


  • Coercion
  • Labour mobility
  • Monopsony
  • Serfdom

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