Keep Them or Free Them: A Contract Theory model about Slaves’ Manumission

Manumission, the freeing of a slave from bondage, has served as a powerful incentive for slaves throughout history. It was common enough in ancient times that economic historians have gone as far as to describe the Roman labor system as a functioning labor market: manumission was common enough that it encouraged slaves to work cooperatively with their owners. This paper develops a simple contract theoretical model to help explaining the economic incentives involved in the manumission of slaves and to produce empirically testable implications and then brings the model to the data. The key implications of the model are twofold. First, by a simple cost-benefit type of argument we assert that less skilled slaves are more likely to be manumitted since, under some reasonable circumstances, “they eat more than what they produce”. Second, since more skilled slaves earn more than the unskilled ones they are less likely to be manumitted for free because they could eventually purchase their own freedom. For the empirical analysis we use the “Louisiana Slave Database” and the “Louisiana Free Database” collected by Gwendolyn Hall and her team and that have been used in other previous works about manumission. The empirical predictions of the model are confirmed by the data. Indeed, skilled workers are less likely to be manumitted and even less likely to be manumitted for free after conditioning on the fact of having been manumitted. Finally, these results stand in contrast to Fenoaltea’s model of incentives in slavery and suggest that the functioning of the slavery system in Southern States might have been similar to that of the modern labor markets where the less skilled or less productive workers are pushed out of the market with the difference that they would probably have been pretty happy of being pushed out. ∗Department of Economics, University of California Berkeley, Evans Hall #3880, Berkeley, CA 94720-3880, [email protected]. I wish to thank Antonio Acconcia, Shawn Cole, Gwendolyn Hall, Maciej Kotowski, Omar Nayeem and Michael Powell for helpful suggestions and conversations. I alone am responsible for all errors and omissions.