Nominal wage patterns, monopsony, and labour market power in early modern England

Paker, Meredith, Stephenson, Judy and Wallis, Patrick (2024) Nominal wage patterns, monopsony, and labour market power in early modern England. Economic History Review. ISSN 1468-0289

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Abstract

Records of long-eighteenth-century English wage rates exhibit almost absolute nominal rigidity over many decades, alongside significant dispersion between the wages paid by different organizations for the same type of work in the same location. These features of preindustrial wages have been obscured by data aggregation and the construction of real wage series, which introduce variation. In this paper, we argue that the standard explanations for wage rigidity in economic history are insufficient. We show econometric evidence for monopsony power in one major organization and argue that the main historical wage series are also affected by employer power. Eighteenth-century England had an imperfectly competitive labour market with large frictions. This gave large organizations the power to set wage policies. We discuss the implications for the eighteenth-century British economy and research into long-run wages more generally.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/14680289
Additional Information:	© 2024 The Authors
Divisions:	Economic History
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor
JEL classification:	J - Labor and Demographic Economics > J4 - Particular Labor Markets > J41 - Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J23 - Employment Determination; Job Creation; Demand for Labor; Self-Employment K - Law and Economics > K1 - Basic Areas of Law > K12 - Contract Law N - Economic History > N8 - Micro-Business History > N83 - Europe: Pre-1913 N - Economic History > N3 - Labor and Consumers, Demography, Education, Health, Income, and Wealth > N33 - Economic History: Labor and Consumers, Demography, Education, Health, Income and Wealth: Europe: Pre-1913 J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc. J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J22 - Time Allocation and Labor Supply J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J21 - Labor Force and Employment, Size, and Structure N - Economic History > N6 - Manufacturing and Construction > N63 - Europe: Pre-1913
Date Deposited:	30 Jan 2024 12:18
Last Modified:	08 May 2024 21:27
URI:	http://eprints.lse.ac.uk/id/eprint/121599

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