Wednesday, January 9, 2019
Vincent Geloso, Bates College Vadim Kufenko, University of Hohenheim - Institute of Economics, and Alex Arsenault Morin, Queen's University (Canada), Faculty of Arts & Science, Department of Economics, have a new paper on Monopsony and Industrial Development in Nineteenth Century Quebec: The Impact of Seigneurial Tenure.
ABSTRACT: We argue that the system of seigneurial tenure used in the province of Quebec until the mid-nineteenth century -- a system which allowed significant market power in the establishment of plants, factories and mills, combined with restrictions on the mobility of the labor force within each seigneurial estate -- is best understood as a system of regionalized monopsonies in the non-farm sector. Seigneurs had incentives to reduce their employment in those sectors to reduce wage rates. We use the fact that later, with the Constitutional Act of 1791, all new settled lands had to be settled under a different system (British land laws). This fact lends itself efficiently to a regression discontinuity design. Using wages contained in the 1831 census, we find strong evidence that the monopsonist features of seigneurial tenure depressed wages and industrial development.