Firm Labor Choices in America before the Civil War: A Simple Model
Posted: 15 Apr 2007
Date Written: April 13, 2007
Early American firms ranging from farms to factories compared the relative advantages and disadvantages of each of the major types of laborer - family, wage, indentured, and slave - available to them. Major variables of comparison included the total productivity, liquidity or availability, cost of control, and cost of hypocrisy of each labor type. Outcomes varied over time, place, and context. In general, slaves were preferred in warmer climes, where work could be organized in gangs, or where slavery was already prevalent. Indentured servants were preferred in northern climes, where some skills were required, or where slavery was uncommon or viewed critically. In northern latitudes, where labor markets were liquid, in roles where skill or education requirements were high, or where slavery was uncommon or considered hypocritical, firms preferred wage laborers.
Keywords: slaves, slavery, wage laborers, wage labor, economic history
JEL Classification: N31, J40
Suggested Citation: Suggested Citation