To Pay or Not to Pay : Positive Incentives as a Calibrating Device in the White Indenture System

This paper analyzes the indentured servitude labor market of colonial America. It is argued that this system developed endogenous market responses to such things as limitations of the legal system and changes in contemporary labor market conditions. In particular, this paper shows the role that so-called positive incentives played as a calibrating device, allowing the economic system to run more smoothly. The analysis uses a model of choice under uncertainty, hence expanding the rationality inherent in the indenture system