Turnover cost and the distribution of slave labor in Anglo-America

In the eighteenth-century British Empire and the antebellum South, slaves were concentrated in domestic service and rural enterprises like agriculture and iron-works. I argue that employers in these sectors chose to employ slaves rather than free labor because they faced especially high turnover costs-that is, costs of searching for a worker and going without labor when a free worker quit or was fired. In the absence of slavery, these sectors were marked by other institutions designed to deal with turnover costs: indentured servitude, employment agencies, and deferred compensation.