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Naidu, Suresh, and
Noam Yuchtman. 2013. "Coercive Contract Enforcement: Law and the Labor Market in Nineteenth Century Industrial Britain."
,
103(1): 107-44.
Show Article Details
DOI: 10.1257/aer.103.1.107
Abstract:British Master and Servant law made employee contract breach a
criminal offense until 1875. We develop a contracting model generating equilibrium contract breach and prosecutions, then exploit
exogenous changes in output prices to examine the effects of labor
demand shocks on prosecutions. Positive shocks in the textile, iron,
and coal industries increased prosecutions. Following the abolition
of criminal sanctions, wages differentially rose in counties that
had experienced more prosecutions, and wages responded more to
labor demand shocks. Coercive contract enforcement was applied in
industrial Britain; restricted mobility allowed workers to commit to
risk-sharing contracts with lower, but less volatile, wages. (JEL J31,
J41, K12, K31, N33, N43)
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Authors:
Naidu, Suresh (Columbia U)
Yuchtman, Noam (U CA, Berkeley)
JEL Classifications:
J31: Wage Level and Structure; Wage Differentials
J41: Labor Contracts
K12: Contract Law
K31: Labor Law
N33: Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: Europe: Pre-1913
N43: Economic History: Government, War, Law, International Relations, and Regulation: Europe: Pre-1913
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