Recruitment Restrictions and Labor Markets: Evidence from the Post-Bellum U. S. South

Abstract

This paper estimates the impacts of labor-mobility restrictions on job-transitions and wages in the postbellum U.S. South. In particular, I estimate the effects of changes in criminal fines, collected from BLS commission of labor reports, charged for "enticement" (offers made to workers already under contract) on sharecropper mobility, tenancy choice, and agricultural wages. I present three different pieces of evidence. The first is a retrospective work history panel of farmers from Jefferson County, Arkansas. The second is a state-year panel, using USDA agricultural wages as a dependent variable. The third is a cohort-state regression using the 1940 IPUMS census micro sample, estimating the effects of antienticement laws on the returns to experience in agricultural labor. I find that a 10% increase in the fine ($13) charged for enticement a)lowered the probability of a move by black sharecroppers by 6 percentage points, a 12% decline, and b) lowered agricultural wages, by reducing the exit probability to sharecropping, by 0.11% (1 cent of daily wages), and c) lowered the returns to experience in agriculture for blacks by 0.6% per year. These results are consistent with an on-the-job search model, where the enticement fine raises the cost of offering a job to employed workers. *