An Economic Model of the English Poor Law.

Historians have yet to determine the precise role played by outdoor relief in agricultural parishes. This chapter provides an economic explanation for the adoption and persistence until 1834 of policies granting outdoor relief to able-bodied laborers, and for the regional nature of outdoor relief. I concluded in Chapter 1 that rural parishes adopted outdoor relief in response to the decline of cottage industry and laborers' loss of land in the second half of the eighteenth century. These changes in the economic environment forced farmers to alter their implicit contracts with labor. I show in this chapter that the dominant form of the new implicit contract differed across regions, because of differences in the magnitude of seasonal fluctuations in the demand for labor. In the grain-producing south and east, seasonal layoffs and outdoor relief became integral parts of the labor contract, while in the livestock farming southwest and north, full-employment contracts were dominant. Labor-hiring farmers were able to choose a profit-maximizing implicit contract because they dominated parish politics. The chapter is organized as follows: The effect of seasonality on the agricultural labor market is discussed in Section 1. Section 2 presents evidence of the magnitude of seasonal fluctuations in labor demand in early-nineteenth-century England. Section 3 describes how poor relief was financed and offers estimates of the share of the poor rate paid by labor-hiring farmers. A model of profit maximization by farmers is developed in Section 4 and used to demonstrate that implicit labor contracts that included seasonal layoffs and outdoor relief provided the lowest cost method, to farmers in grain-producing parishes, for securing a peak-season labor force. [ABSTRACT FROM AUTHOR]