Outside Options, Coercion, and Wages

Removing the Sugar Coating

Dados Bibliográficos

ID9715547
AutoresChristian Dippel (University of California, Los Angeles, and NBER, autor correspondente), Avner Greif (Stanford University and ‘Institutions, Organizations and Growth Program’, Canadian Institute for Advanced Research), Daniel Trefler (University of Toronto, NBER and ‘Institutions, Organizations and Growth Program’, Canadian Institute for Advanced Research)
Ano2020
Volume130
Fascículo630
Páginas1678-1714
Data de publicação2020-08-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Economic Journal (JOURNAL)
Identificadores do periódicoISSN: 0013-0133 • E-ISSN: 1468-0297
EditoraOxford University Press (PUBLISHER • GB)
DOI10.1093/ej/ueaa030
OpenAlexW3122088401
IdiomaEN
Citações recebidas10
Referências citadas47

In economies with a large informal sector firms can increase profits by reducing workers’ outside options in that informal sector. We formalise this idea in a simple model of an agricultural economy with plantation owners who lobby the government to enact coercive policies—e.g., the eviction and incarceration of squatting smallhold farmers—that reduce the value to working outside the formal sector. Using unique data for 14 British West Indies ‘sugar islands’ from 1838 (the year of slave emancipation) until 1913, we examine the impact of plantation owners’ power on wages and coercion-related incarceration. To gain identification, we utilise exogenous variation in the strength of the plantation system in the different islands over time. Where planter power declined we see that incarceration rates dropped, and agricultural wages rose, accompanied by a decline in formal agricultural employment

Agriculture · Business · Coercion (linguistics · Economics · Eviction · Geography · Government (linguistics · Informal sector · Labour economics · Market economy · Political science · Value (mathematics · Culture, Economy, and Development Studies · Law · Microfinance and Financial Inclusion · Taxation and Compliance Studies