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The Market Evaluation of Human Capital: The Case of Indentured Servitude

Galenson, David W. (1980) The Market Evaluation of Human Capital: The Case of Indentured Servitude. Social Science Working Paper, 316. California Institute of Technology , Pasadena, CA. (Unpublished)

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This paper examines the market for human capital created by the institution of indentured servitude in colonial America. The indenture system allowed English emigrants to obtain passage to the colonies by selling claims on their future labor. With the size of the debt approximately equal for all emigrants, the length of the term for which a servant was bound is predicted to have varied inversely with expected productivity in the colonies. Analysis of two collections of contracts made in the seventeenth and eighteenth centuries supports the prediction. Age, skill, and literacy-were negatively related to length of indenture. Women received shorter terms than men at young ages, while servants bound for the West Indies and those bound in periods of high colonial demand for labor also received reductions.

Item Type:Report or Paper (Working Paper)
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Additional Information:I am grateful to Stanley Engerman for discussions of many of the issues treated in this paper and comments on an earlier draft. I would also like to thank Andrew Abel, Gary Becker, Lance Davis, Robert Fogel, Richard Freeman, Russell Menard, Frederic Mishkin, Sherwin Rosen, T. W. Schultz, George Stigler and participants in seminars at Columbia University, the University of Chicago, the University of Illinois, the Newberry Library, the University of Southampton, and the 1980 Cliometrics Conference for their suggestions and comments. Published as Galenson, David W. "The market evaluation of human capital: The case of indentured servitude." Journal of Political Economy 89.3 (1981): 446-467.
Group:Social Science Working Papers
Subject Keywords:Human capital, Indentured servitude, Productivity, Contracts, Cash payments, Coefficients, Literacy, Labor demand, Political economy, Net income
Series Name:Social Science Working Paper
Issue or Number:316
Record Number:CaltechAUTHORS:20171012-140813265
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:82322
Deposited By: Jacquelyn Bussone
Deposited On:12 Oct 2017 22:49
Last Modified:03 Oct 2019 18:53

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