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The price of human capital in a pre-industrial economy: Premiums and apprenticeship contracts in 18th century England

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  • Minns, Chris
  • Wallis, Patrick

Abstract

Training through apprenticeship provided the main mechanism for occupational human capital formation in pre-industrial England. This paper demonstrates how training premiums (fees) complemented the formal legal framework surrounding apprenticeship to secure training contracts. Premiums varied in response to scarcity rents, the expected productivity of masters and apprentices, and served as compensation for the anticipated risk of default. In most trades premiums were small enough to allow access to apprenticeship training for youths from modest families.

Suggested Citation

  • Minns, Chris & Wallis, Patrick, 2013. "The price of human capital in a pre-industrial economy: Premiums and apprenticeship contracts in 18th century England," Explorations in Economic History, Elsevier, vol. 50(3), pages 335-350.
  • Handle: RePEc:eee:exehis:v:50:y:2013:i:3:p:335-350
    DOI: 10.1016/j.eeh.2013.02.001
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    References listed on IDEAS

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    1. Chris Minns & Patrick Wallis, 2012. "Rules and reality: quantifying the practice of apprenticeship in early modern England," Economic History Review, Economic History Society, vol. 65(2), pages 556-579, May.
    2. Gregory Clark, 2005. "The Condition of the Working Class in England, 1209-2004," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1307-1340, December.
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    6. Galenson, David W, 1981. "The Market Evaluation of Human Capital: The Case of Indentured Servitude," Journal of Political Economy, University of Chicago Press, vol. 89(3), pages 446-467, June.
    7. Minns, Chris & Wallis, Patrick, 2011. "Why did (pre‐industrial) firms train?: premiums and apprenticeship contracts in 18th century England," Economic History Working Papers 41348, London School of Economics and Political Science, Department of Economic History.
    8. Hamilton, Gillian, 1996. "The Market for Montreal Apprentices: Contract Length and Information," Explorations in Economic History, Elsevier, vol. 33(4), pages 496-523, October.
    9. Go, Sun & Lindert, Peter, 2010. "The Uneven Rise of American Public Schools to 1850," The Journal of Economic History, Cambridge University Press, vol. 70(01), pages 1-26, March.
    10. Voth, Hans-Joachim, 2001. "The Longest Years: New Estimates Of Labor Input In England, 1760 1830," The Journal of Economic History, Cambridge University Press, vol. 61(04), pages 1065-1082, December.
    11. Acemoglu, Daron & Pischke, Jorn-Steffen, 1999. "Beyond Becker: Training in Imperfect Labour Markets," Economic Journal, Royal Economic Society, vol. 109(453), pages 112-142, February.
    12. Van Zanden, Jan Luiten, 2009. "The skill premium and the ‘Great Divergence’," European Review of Economic History, Cambridge University Press, vol. 13(01), pages 121-153, April.
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    14. Leunig, Tim & Minns, Chris & Wallis, Patrick, 2011. "Networks in the Premodern Economy: The Market for London Apprenticeships, 1600–1749," The Journal of Economic History, Cambridge University Press, vol. 71(02), pages 413-443, June.
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    Citations

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    Cited by:

    1. Matthias Doepke & Joel Mokyr & David de la Croix, 2013. "Apprenticeship and Technological Progress in the Malthusian World," 2013 Meeting Papers 76, Society for Economic Dynamics.
    2. Rao, Neel, 2015. "General training in labor markets: Common value auctions with unobservable investment," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 19-45.
    3. repec:spr:cliomt:v:12:y:2018:i:2:d:10.1007_s11698-017-0163-z is not listed on IDEAS
    4. Wallis, Patrick & Colson, Justin & Chilosi, David, 2016. "Puncturing the Malthus delusion: structural change in the British economy before the industrial revolution, 1500-1800," Economic History Working Papers 66816, London School of Economics and Political Science, Department of Economic History.
    5. Moshe Justman & Karine Beek, 2015. "Market forces shaping human capital in eighteenth-century London," Economic History Review, Economic History Society, vol. 68(4), pages 1177-1202, November.
    6. Feldman, Naomi E. & van der Beek, Karine, 2016. "Skill choice and skill complementarity in eighteenth century England," Explorations in Economic History, Elsevier, vol. 59(C), pages 94-113.

    More about this item

    Keywords

    Apprenticeship; Training; 18th century England;

    JEL classification:

    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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