TY - JOUR
T1 - Market forces shaping human capital in eighteenth-century London
AU - Justman, Moshe
AU - van der Beek, Karine
N1 - Publisher Copyright:
© 2015 Economic History Society.
PY - 2015/11/1
Y1 - 2015/11/1
N2 - This article draws on quantitative and descriptive data from Robert Campbell's manual for prospective apprentices, The London tradesman (1747), to demonstrate the responsiveness of apprenticeship premiums in mid-eighteenth-century London to market forces of supply and demand. It first shows that Campbell's data on mid-eighteenth-century journeymen wages, apprenticeship premiums, and masters' set-up costs in London are consistent with other sources. It then applies instrumental variable regressions to estimate the elasticity of apprenticeship premiums with respect to journeymen wages and set-up costs, using Campbell's education and ability requirements by trade to instrument for wages. We find an elasticity of one with respect to wages, and of 0.25 with respect to set-up costs, both statistically significant at a p-value less than 0.1%. We interpret these findings as supporting the thesis that apprenticeship played an important role in adapting the English workforce to the skill requirements of the industrial revolution in its early stages, insofar as the institution of apprenticeship in London was representative of other parts of England. Furthermore, by demonstrating the internal and external consistency of Campbell's observations, our findings should encourage their use as an unparalleled source of detailed, trade-specific wage data from the early years of the industrial revolution.
AB - This article draws on quantitative and descriptive data from Robert Campbell's manual for prospective apprentices, The London tradesman (1747), to demonstrate the responsiveness of apprenticeship premiums in mid-eighteenth-century London to market forces of supply and demand. It first shows that Campbell's data on mid-eighteenth-century journeymen wages, apprenticeship premiums, and masters' set-up costs in London are consistent with other sources. It then applies instrumental variable regressions to estimate the elasticity of apprenticeship premiums with respect to journeymen wages and set-up costs, using Campbell's education and ability requirements by trade to instrument for wages. We find an elasticity of one with respect to wages, and of 0.25 with respect to set-up costs, both statistically significant at a p-value less than 0.1%. We interpret these findings as supporting the thesis that apprenticeship played an important role in adapting the English workforce to the skill requirements of the industrial revolution in its early stages, insofar as the institution of apprenticeship in London was representative of other parts of England. Furthermore, by demonstrating the internal and external consistency of Campbell's observations, our findings should encourage their use as an unparalleled source of detailed, trade-specific wage data from the early years of the industrial revolution.
UR - http://www.scopus.com/inward/record.url?scp=84944159314&partnerID=8YFLogxK
U2 - 10.1111/ehr.12092
DO - 10.1111/ehr.12092
M3 - Article
AN - SCOPUS:84944159314
SN - 0013-0117
VL - 68
SP - 1177
EP - 1202
JO - Economic History Review
JF - Economic History Review
IS - 4
ER -