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

Author

Listed:
  • Paker, Meredith
  • Stephenson, Judy
  • Wallis, Patrick

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.

Suggested Citation

  • Paker, Meredith & Stephenson, Judy & Wallis, Patrick, 2024. "Nominal wage patterns, monopsony, and labour market power in early modern England," LSE Research Online Documents on Economics 121599, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:121599
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    File URL: http://eprints.lse.ac.uk/121599/
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    More about this item

    Keywords

    real wages; construction; eighteenth-century England; industrial revolution; labour markets; monopsony; wages;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • N83 - Economic History - - Micro-Business History - - - Europe: Pre-1913
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • N63 - Economic History - - Manufacturing and Construction - - - Europe: Pre-1913

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