This study argues that the decline of coercive labor institutions over the course of industrialization was partly driven by complementarity between physical capital and effective labor in manufacturing. Given the difficulty of extracting labor effort in care-intensive industrial tasks through monitoring and punishment, capital-owning elites ultimately chose to emancipate workers to induce their supply of effective labor and, thus, boost the return to physical capital. This hypothesis is empirically examined in the context of serf emancipation in nineteenth-century Prussia.
The post Structural Change, Elite Capitalism, and the Emergence of Labor Emancipation appeared first on The Review of Economic Studies.
