ECON 331: Term Paper Proposal
Alexander Manson (06315437)
Variation on Topic #2: Indentured Servitude
My essay will outline the main causes for the decline in indentured servitude in the United
States in the early 19th century. I will focus in particular on German immigrants who made up the
majority of the non-British European chain migrates (predominantly in the 18th and early 19th
century). I justify this decision based on the large amount of available reliable data and literature on
German migration in particular. Given demand and supply side hypothetic explanations of why this
decline occurred, I will advocate in my thesis the supply side theory of greater access to borrowing,
specifically improved capital markets and kinship relations, played the most prominent role.
Using journal articles, class notes and intuition I have learned from various courses in
economics at Queen's (231 and 239 thus far), I have supported economist Farley Grubb's findings
and added a few factors I believe may contribute further to the explanation the supply of servant
immigrants changing in the early 19th century. I have listed below some of my rough ideas and
points I would like to include in this essay in an outline format.
Working Thesis: The cause of the decline of indentured servitude in the United States in the early 19th
century is explained by improved capital markets and access to networks of financial and social aid.
Part I: Abstract
Part II: Key Concepts

What is indentured servitude (IS)?
-explain what it is, process (Europe: sign -> boat -> US: auction ($ to captain)-> work)
- most accurate available information exists for German emigrants
- explain significant decline from 1800-1830
-there are many hypothesis as to why IS system declined (S & D)
Part III: Introduction

The demographics and usage of IS
-1800-1830 IS decline and why
-during 1700's 1/2 of all Europeans migrating to US used IS (Grubb 94)
-#'s and statistics to illustrate (i.e. 130k German immigrants (1720-1820) to Philadelphia =
main port of entry into America)

Why was it used/how did(n't) it work?
-began with immigration of unrelated individuals (no blood/family); incentive to shirk
-couldn't afford to borrow/pay the fare to cross the Atlantic
-signed a contract to work for 𝑥 years based on human capital and age (usefulness)
-inverse relation between contract length and acquired human capital
-how the present value of contracts were calculated: (W1 – M1) / (1+r) t + f/(1+r) t
-Fare calculation (include if you were able to borrow/pay: 10% cheaper + no required
service - tobacco calculation) - significance
Part IV: Explanations: Supply & Demand Sides


Hypothesis (both S & D)
-D: enforcement of contract difficult, free-wage labour superior, schooling req. (Grubb
rejects)
-S: higher wages in Europe, greater access to borrowing
-why Grubb chooses to mostly exclude demand side
-use diagram depicting supply exceeds demand (avg. adult price per year of service vs.
quantity of immigrant servants arriving per year)
*Include immigrant wealth and declining fares theory
Other supply side considerations not in the literature/class material:
𝑇

Idea of risk aversion (sure vs. expected) and total benefit ∫0 𝐸(𝑇𝐵𝑈𝑆 − 𝑇𝐵𝐸𝑈 − 𝑇𝐶)𝑒 −𝑟𝑡 𝑑𝑡 of the

move important aspect
Children: parents may be more likely to make the move for the hope of a better life for the next
generation (although noted first settlers mainly unskilled young males)
Part V: Greater Access to Borrowing




Include Grubb's "kinship + capital markets" + network for aid (strong point to add to greater
borrowing access) - essentially summarize and dissect article
Also include Grubb quoted conclusion re: supply > demand
Notion of shirking removed if loans are from friends/family (monitoring issues no longer an
issue)
Chain migration wedge
Part VI: Conclusion


Re-state initial observation of supply side dominance in the downfall of IS mainly due to capital
markets + kinship
Include risk, and welfare evaluations as sources of possible inquiry into decisions of migrants
(supply side considerations)
Kinship hypotheses: Further breakdown
http://www.kakanien.ac.at/beitr/labourmigration/SHaug1.pdf
Affinity hypothesis: existence of friends/relatives at place of residence reduces migration tendency
Information hypothesis: when friends/relatives already living abroad increases migration tendency (access to
information on living conditions/jobs/resources etc.)
Facilitating hypothesis: friends/relatives promote channel migration to their own place of residence by facilitating
adjustment to new location: job search, material support, providing new social ties etc. (social networks are positive
factors)
Conflict hypothesis: conflicts within community/family may provide incentive to leave
Encouraging hypothesis: families may encourage members to migrate for work e.g. to provide secure household income
Sources*:
Galenson, D. W. (1984). The Rise and Fall of Indentured Servitude in the Americas: An Economic
Analysis . The Journal of Economic History, 44(1), 1-26.
Grubb, F. (1994). The End of European Immigrant Servitude in the United States: An Economic
Analysis of Market Collapse, 1772-1835. The Journal of Economic History , 54(4), 794-824.
Grubb, F. (2011). German Immigration and Servitude in America. Abington, England: Routledge
Explorations in Economic History.
*Will add more.
look at:
The Auction of Redemptioner Servants, Philadelphia, 1771-1804: An Ecnomic Analysis
Farley Grubb
The Journal of Economic History , Vol. 48, No. 3 (Sep., 1988), pp. 583-603
Indentured Servitude: The Philadelphia Market, 1771-1773
Robert O. Heavner
The Journal of Economic History , Vol. 38, No. 3 (Sep., 1978), pp. 701-713