Proposal preview

The Causes and Effects of Labor Coercion in Global Perspective

For most of history, the majority of labor relations have been coercive. Labor coercion has taken commonly known forms of slavery, serfdom, and indentured servitude, among others. While the degree of coercion varies, motives for adoption and abolition might in fact be very similar across institutions. The literature discusses driving forces such as changes in the supply of labor (Domar, 1970; Brenner, 1976), the related changes in the availability of outside options (Acemoglu and Wolitzky,2011; Ogilvie and Carus, 2014), and changes in the distribution of political power (Acemoglu and Robinson, 2000).
This session will discuss the economic and institutional aspects of labor coercion across the world. Recently, the rise and fall of labor coercion has been discussed in the framework of new institutional economics using a quantitative approach, also due to the availability of new data and new estimation techniques. The session will draw parallels between case-studies identifying the main economic and institutional aspects that characterized the different experiences of labor coercion around the world for different historical periods.
The gradual dismissal of serfdom in Western Europe from the late Middle Age and the rise of serfdom in Eastern Europe (the so-called “second serfdom”) is at the center of the so-called Brenner debate that will be picked up in this session when discussing the rise of serfdom in Russia and Bohemia. In similar fashion, the adoption of slavery in Egypt will allow to draw parallels across regions and labor institutions. Other contributions will discuss the reasons for the abolition of slavery in the Caribbean and serfdom in Prussia. A third group of contributions will discuss the consequences of the abolition of serfdom in Russia and Denmark.
Given the wide geographic coverage of the contributions, it is the aim of this session to draw some general conclusions on the formation, existence, and abolition of the institutions of labor coercion.

Organizer(s)

  • Francesco Cinnirella University of Southern Denmark cinnirella@sam.sdu.dk Denmark
  • Erik Hornung University of Cologne hornung@wiso.uni-koeln.de Germany

Session members

  • Christian Dippel , UCLA Anderson School of Management
  • Erik Hornung, University of Cologne
  • Alexander Klein, University of Kent
  • Andrei Markevich , New Economic School
  • Timur Natkhov , Higher School of Economics
  • Steven Nafziger , Williams College
  • Paul Sharp, University of Southern Denmark
  • Felipe Caicedo, University of British Columbia

Discussant(s)

Papers

Panel abstract

Recently, the rise and fall of labor coercion has been discussed in the framework of new institutional economics using a quantitative approach, also due to the availability of new data and new estimation techniques. The session will draw parallels between case-studies identifying the main economic and institutional aspects that characterized the different experiences of labor coercion around the world for different historical periods. The gradual dismissal of serfdom in Western Europe from the late Middle Age and the rise of serfdom in Eastern Europe is at the center of the so-called Brenner debate that will be picked up in this session when discussing the rise of serfdom in Russia and Bohemia. Other contributions will discuss the reasons for the abolition of slavery in the Caribbean and serfdom in Prussia. A third group of contributions will discuss the consequences of the abolition of serfdom in Russia and Denmark.

1st half

All Along the Watchtower: Tatar Slave Raids and the Origins of Russian Serfdom

Andrea Matranga, Timur Natkhov

Why did Russia enserf its previously free peasants, just as Western Europe was undergoing the opposite transition? In this paper I propose a new theory, that argues that serfdom was necessary to ensure that the defense cordon against the Tatar slave raids from the south could be effectively manned. In support of my theory I demonstrate a geographic association between serfdom and the sequence of linear defenses employed. I also deploy spatial methods to calculate the optimal invasion routes for Tatars, as well as the optimal defense lines to block the raids. I find that modern patterns of development are significantly correlated with calculated defense lines towards the South, where nomadic raids made the cordon defense necessary, but not towards the West, where invaders had extensive logistical tails and could be effectively parried by blocking only the major roads.

Why did Russia enserf its previously free peasants, just as Western Europe was undergoing the opposite transition? In this paper I propose a new theory, that argues that serfdom was necessary to ensure that the defense cordon against the Tatar slave raids from the south could be effectively manned. In support of my theory I demonstrate a geographic association between serfdom and the sequence of linear defenses employed. I also deploy spatial methods to calculate the optimal invasion routes for Tatars, as well as the optimal defense lines to block the raids. I find that modern patterns of development are significantly correlated with calculated defense lines towards the South, where nomadic raids made the cordon defense necessary, but not towards the West, where invaders had extensive logistical tails and could be effectively parried by blocking only the major roads.

The introduction of serfdom and labor markets

Peter Sandholt Jensen, Cristina Victoria Radu, Battista Severgnini, Paul Sharp

This research provides evidence on how restrictions on labor mobility, such as serfdom and other types of labor coercion, impact labor market outcomes. To do so, we estimate the impact of a large shock to labor mobility in the form of the reintroduction of serfdom in Denmark in 1733, which was targeted at limiting the mobility of farmhands. Using a unique data source based on eighteenth century estates, we test whether serfdom affected the wages of farmhands more strongly than other groups in the labor market using a differences-in-differences approach, and find evidence consistent with a strong negative effect of serfdom following its introduction. 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. Thus, our results suggest that serfdom was effectively reducing mobility.

This research provides evidence on how restrictions on labor mobility, such as serfdom and other types of labor coercion, impact labor market outcomes. To do so, we estimate the impact of a large shock to labor mobility in the form of the reintroduction of serfdom in Denmark in 1733, which was targeted at limiting the mobility of farmhands. Using a unique data source based on eighteenth century estates, we test whether serfdom affected the wages of farmhands more strongly than other groups in the labor market using a differences-in-differences approach, and find evidence consistent with a strong negative effect of serfdom following its introduction. 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. Thus, our results suggest that serfdom was effectively reducing mobility.

Capital-Skill Complementarity and the Emergence of Labor Emancipation

Quamrul Ashraf, Francesco Cinnirella, Oded Galor, Boris Gershman, Erik Hornung

This paper advances a novel hypothesis regarding the historical roots of labor emancipation. It argues that the decline of coercive labor institutions in the industrial phase of development has been an inevitable by-product of the intensification of capital-skill complementarity. In light of the growing significance of skilled labor for fostering the return to physical capital, elites in society were induced to relinquish their historically profitable coercion of labor in favor of employing free skilled workers, thereby incentivizing the masses to engage in broad-based human capital acquisition, without fear of losing their skill premium to expropriation. In line with the proposed hypothesis, exploiting a plausibly exogenous source of variation in a relevant form of proto-industrialization across regions of nineteenth-century Prussia, the initial abundance of elite-owned physical capital that also came to be associated with skill-intensive industrialization is shown to have contributed to the subsequent intensity of de facto serf emancipation.

This paper advances a novel hypothesis regarding the historical roots of labor emancipation. It argues that the decline of coercive labor institutions in the industrial phase of development has been an inevitable by-product of the intensification of capital-skill complementarity. In light of the growing significance of skilled labor for fostering the return to physical capital, elites in society were induced to relinquish their historically profitable coercion of labor in favor of employing free skilled workers, thereby incentivizing the masses to engage in broad-based human capital acquisition, without fear of losing their skill premium to expropriation. In line with the proposed hypothesis, exploiting a plausibly exogenous source of variation in a relevant form of proto-industrialization across regions of nineteenth-century Prussia, the initial abundance of elite-owned physical capital that also came to be associated with skill-intensive industrialization is shown to have contributed to the subsequent intensity of de facto serf emancipation.

The Economics of Russian Serf Manumission, 1800-1861

Steven Nafziger

This paper presents presents and analyzes new data on the incidence of serf estate manumissions prior to the Emancipation of 1861. To help interpret the empirical findings, I outline a simple theoretical framework that frames the decision over ending a coercive labor arrangement as an outcome of a bargaining process between serfs and their owners. The evidence and interpretation of pre-1861 manumissions have implications for our understanding of the subsequent processes of Russian serf emancipation and land redemption.

This paper presents presents and analyzes new data on the incidence of serf estate manumissions prior to the Emancipation of 1861. To help interpret the empirical findings, I outline a simple theoretical framework that frames the decision over ending a coercive labor arrangement as an outcome of a bargaining process between serfs and their owners. The evidence and interpretation of pre-1861 manumissions have implications for our understanding of the subsequent processes of Russian serf emancipation and land redemption.

2nd half

The Economic Effects of the Abolition of Serfdom: Evidence from the Russian Empire

Andrei Markevich and Ekaterina Zhuravskaya

We document substantial increases in agricultural productivity, industrial output and peasants’ nutrition in Imperial Russia as a result of the abolition of serfdom in 1861. Before the emancipation, provinces, where serfs constituted the majority of agricultural laborers, lagged behind provinces that primarily relied on free labor. The emancipation led to a significant but partial catch up. Better incentives of peasants resulting from the cessation of ratchet effect were a likely mechanism behind a relatively fast positive effect of reform on agricultural productivity. The land reform, which instituted communal land tenure after the emancipation, diminished growth in productivity in repartition communes.

We document substantial increases in agricultural productivity, industrial output and peasants’ nutrition in Imperial Russia as a result of the abolition of serfdom in 1861. Before the emancipation, provinces, where serfs constituted the majority of agricultural laborers, lagged behind provinces that primarily relied on free labor. The emancipation led to a significant but partial catch up. Better incentives of peasants resulting from the cessation of ratchet effect were a likely mechanism behind a relatively fast positive effect of reform on agricultural productivity. The land reform, which instituted communal land tenure after the emancipation, diminished growth in productivity in repartition communes.

Outside Options, Coercion, and Wages: Removing the Sugar Coating

Christian Dippel

In economies with a large informal sector firms can increase profits by reducing workers’ outside options in that informal sector. We formalize this idea in a simple model of an agricultural economy with plantation owners who lobby the government to enact coercive policies—e.g. the eviction and incarceration of squatting smallhold farmers—that reduce the value to working outside the formal sector. Using unique data for 14 British West Indies ‘sugar islands’ from the year of slave emancipation in 1838 until 1913, we examine the impact of plantation owners’ power on wages and coercion-related incarceration. To gain identification, we utilize exogenous variation in the ease with which smallholders could evade the plantation system in the different islands over time. Where evading the plantation system became exogenously easier, planter power declined, incarceration rates dropped, and agricultural wages rose, accompanied by a decline in formal agricultural employment.

In economies with a large informal sector firms can increase profits by reducing workers’ outside options in that informal sector. We formalize this idea in a simple model of an agricultural economy with plantation owners who lobby the government to enact coercive policies—e.g. the eviction and incarceration of squatting smallhold farmers—that reduce the value to working outside the formal sector. Using unique data for 14 British West Indies ‘sugar islands’ from the year of slave emancipation in 1838 until 1913, we examine the impact of plantation owners’ power on wages and coercion-related incarceration. To gain identification, we utilize exogenous variation in the ease with which smallholders could evade the plantation system in the different islands over time. Where evading the plantation system became exogenously easier, planter power declined, incarceration rates dropped, and agricultural wages rose, accompanied by a decline in formal agricultural employment.

Tordesillas, Slavery and the Origins of Brazilian Inequality

Thomas Fujiwara, Humberto Laudares, Felipe Valencia Caicedo

This article studies the long-term impact of slavery on economic inequality at the receiving end of the spectrum. We focus on Brazil, one of the largest slave importers and the last country to abolish this institution in the Western Hemisphere, in 1888. To deal with the potential endogeneity of slavery placement, we use a spatial Regression Discontinuity (RD) framework, exploiting the Tordesillas line, which divided Portuguese and Spanish empires in modern-day Brazil. We find that the number of slaves in 1872 is discontinuously higher in the Portuguese side of the border, consistent with this colonial power’s historical comparative advantage in this trade. We then show how this discontinuity has led to higher income inequality of 0.103 Gini coefficient points, approximately 20% of average Brazilian income inequality. In terms of mechanisms, we further find that more slave intensive areas have higher income and educational racial imbalances and worse public institutions today.

This article studies the long-term impact of slavery on economic inequality at the receiving end of the spectrum. We focus on Brazil, one of the largest slave importers and the last country to abolish this institution in the Western Hemisphere, in 1888. To deal with the potential endogeneity of slavery placement, we use a spatial Regression Discontinuity (RD) framework, exploiting the Tordesillas line, which divided Portuguese and Spanish empires in modern-day Brazil. We find that the number of slaves in 1872 is discontinuously higher in the Portuguese side of the border, consistent with this colonial power’s historical comparative advantage in this trade. We then show how this discontinuity has led to higher income inequality of 0.103 Gini coefficient points, approximately 20% of average Brazilian income inequality. In terms of mechanisms, we further find that more slave intensive areas have higher income and educational racial imbalances and worse public institutions today.

Recent Advances in Research on Serfdom: Some Methodological Challenges

Alexander Klein

Recent years have witnessed an increased scholarly interest in serfdom, especially among quantitative economic historians. This paper reflects upon that body of research. It identifies the frontier of current research on serfdom, discuss the challenges of empirical research on serfdom, and recent advances of economic theory of serfdom. It proposes a set of theoretical frameworks relevant for investigating serfdom itself as well as the effects of serfdom on economic performance, and a set of possible solutions to the empirical challenges faced by research on serfdom.

Recent years have witnessed an increased scholarly interest in serfdom, especially among quantitative economic historians. This paper reflects upon that body of research. It identifies the frontier of current research on serfdom, discuss the challenges of empirical research on serfdom, and recent advances of economic theory of serfdom. It proposes a set of theoretical frameworks relevant for investigating serfdom itself as well as the effects of serfdom on economic performance, and a set of possible solutions to the empirical challenges faced by research on serfdom.