The Market for Montreal Apprentices: Contract Length and Information

The Market for Montreal Apprentices: Contract Lengthand Information*

GILLIAN HAMILTON

Department of Economics, University of Toronto

This paper examines the nature of apprenticing arrangements in Montreal around theturn of the nineteenth century, using apprenticeship contracts from a larger body of notarialrecords found in Quebec. The principal question addressed is what determined apprentice-ship length? I find that the characteristics of both masters and their boys were important.For example, older (more productive) boys served shorter terms, as did those trainingunder masons and butchers. There is also evidence that the precision of a master’s estimateof a boy’s future value was important. Masters often relied on probationary periods tobetter gauge a boy’s worth before signing a contract. Probations, all else equal, wereassociated with shorter contracts. Because masters anticipated fewer ‘‘failures’’ when theywere better informed, matches which began with probations were associated with appren-tices of higher expected value.r 1996 Academic Press, Inc.

The apprenticeship lost its position as the principal source of domesticallytrained labor in North America in the mid-nineteenth century. Most studies of thisinstitution have focused on this event.1 In contrast, we know little of how a‘‘healthy’’ apprenticeship functioned in the preceding period, as few records ofthe agreements survive. This paper supplies some of this missing information byanalyzing a rich data set of apprenticeship contracts from turn of the nineteenthcentury Montreal. This is a period in which the market for apprenticeships inQuebec was stable and effective, despite an absence of guilds. These data providea unique view of how this market functioned, and the characteristics of the

* I received many helpful comments and suggestions from Michael Baker, Dwayne Benjamin, andAloysius Siow. In addition, I thank Lee Alston, Lou Cain, Farley Grubb, Arthur Hosios, Frank Lewis,Gary Koop, Larry Neal, Dale Poirier, Bill Rorabaugh, Ken Sokoloff; the referees; the participants atthe 1994 Cliometrics, 19th Use of Quantitative Methods in Canadian Economic History, and 1994Social Science History Association conferences, and seminar participants at U.C.L.A., Caltech,Northwestern, Illinois, and Toronto. This research was supported by the Connaught Foundation. I amresponsible for remaining errors and omissions.

1 See, for example, Elbaum (1989). Steinfeld (1991) and Wright (1995) also offer interesting andprovoking views of the decline of apprenticeship, within the broader context of the evolution of ‘‘freelabor.’’

EXPLORATIONS IN ECONOMIC HISTORY33, 496–523 (1996)ARTICLE NO. 0027

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0014-4983/96 $18.00Copyrightr 1996 by Academic Press, Inc.All rights of reproduction in any form reserved.

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No. of Pages—28 First page no.—496 Last page no.—523

apprenticeship relationship.2 The objective of the paper is to consider thelong-term nature of the agreements, and determine how observable informationabout the potential quality of an employment match influenced apprenticeshipduration.In some respects, setting apprenticeship length appears to have been a straight-

forward exercise. If the market was efficient and competitive, the compensationboys received over that period should have been roughly equal to the value of theoutput they produced for their masters. Hence the apprentice’s and master’sproductivity, as well as the boy’s remuneration, should have affected term length.Relatively productive boys, or those who accepted less pay (all else the same)should have served less time.Apprentices in Montreal all received roughly the same subsistence wage, as

well as the promise of an education in their master’s craft. Some contractsincluded provision for an extra lump-sum payment at the end of the contract, anda few received nonpecuniary benefits like reading and writing lessons. In contrastto their relatively fixed pay, apprentices served terms that ranged widely inlength—from 1 to 14 years. Multivariate regression analysis demonstrates thatapprenticeship length was remarkably sensitive to factors related to a boy’s, andhis master’s, characteristics, as well as the conditions of employment. Forexample, other things the same, younger boys served longer terms, as did boystrained under masters located in the city. In addition, boys who received extracompensation, such as classes in reading, writing, and arithmetic, served moretime.What seems like a simple calculation of length was undoubtedly a more

complex computation. Indeed, the amount of information masters had about anapprentice’s future stream of productivity (at the time the contract was penned)should also have affected term length and the conditions of apprenticeship. Thelength of an apprenticeship, as well as the level of compensation, were set down ina contract drafted at the beginning of the term. Thus term length was notcontingent onex postproductivity, but on a boy’s expected stream of productivity.It was undoubtedly difficult to pinpoint accurately a teenage boy’s contribution tooutput four or five years in the future. In some cases a master would have beenquite familiar with an apprentice and his family, and fairly confident of the boy’spotential. On the other hand, a boy, whether well known or not, may have beenquite unsure of his proclivity toward a particular trade. Hiring an apprentice thatturned out to be inadequate would have been costly, because of the expense ofwriting out a contract and the fact that masters would have forgone the opportu-nity to learn about another apprentice. Masters did have some recourse, for theycould start boys under probationary conditions, or seek out intermediaries to helpthem find a suitable boy.

2 Other studies have drawn on apprenticeship contracts in Quebec’s notarial archives: Burgess(1987) and Audet (1975) use contracts in the Montreal archives; Ruddel (1969), Moogk (1973), andHardy and Ruddel (1977) draw from the Quebec City archives.

497THE MARKET FOR APPRENTICES


The contracts reveal that information that improved the accuracy of a master’sassessment of his apprentice’s expected future value affected term length. Thiseffect can best be illustrated by considering the role of probations, which wereused in many apprenticeships. Trial periods afforded masters the opportunity toobserve a prospective apprentice more closely, and allowed the boy a chance towork in his master’s trade before locking into a long-term commitment. Boysunsuited to the trade (by either party’s assessment) would not have pursued acontract. Furthermore, masters would have been able to assess more accuratelythe future contribution of boys good enough to retain. Weeding out bad matchesand tailoring contracts better to boys’ per period future value acted to raise theexpected value of these better informed matches. All else equal, contracts withprobations were on average one-half year shorter. In addition, because someinadequate boys were weeded out before a contract was drafted, contracts thatbegan with a successful probation were much less likely to end prematurely.The results should inform future research on the decline of apprenticeship. It

seems unlikely, for example, that a successful apprenticeship system requiredcraft guilds. While guilds were an important organization that could help provideinformation to masters, there were other institutions which could play this role.The contracts suggest that information about the value and reliability of bothmasters and apprentices was particularly important in early nineteenth-centuryMontreal. At this time, the city contained a small and stable population. Later on,however, Montreal grew rapidly, with immigrants from (primarily) Great Britain.Reliable information was undoubtedly more difficult to acquire in this environ-ment, and may have contributed to the decline of the traditional long-termapprenticeship.

I. APPRENTICESHIP IN MONTREAL

Following the French civil law tradition, apprenticeship contracts in Montrealwere drawn up in a notary’s office. By law, notaries retained copies of alldocuments they penned. When they retired or died, their records were kept.Because of this, many apprenticeship contracts have survived. For the periodexamined here, 1791 to 1820, there exists well over 1,500 contracts.3 Thesurviving contracts undoubtedly represent a significant proportion of the originalpopulation of contracts, which probably encompassed the majority of teenageboys. An apprenticeship at this time was the predominant means of acquiringskill. There were few schools and formal apprenticeships existed in all of theskilled crafts, professions and service trades. Even farmers had occasion to hireapprentices. In addition, drawing up a contract when hiring an apprentice wasvery common across Quebec. The only exception appears to have occurred whena father taught his son.4 In 1810, for example, Montreal consisted of roughly

3 According to Audet (1975), there were almost 1,400 contracts involving males during the period1790 to 1812.

4 Burgess (1987, pp. 61–62) who reconstituted families (using parish registers, nominal census

498 GILLIAN HAMILTON


12,000 people, of which perhaps 7,000 were male, and about one hundred were15-year-old boys.5 Since the surviving contracts comprise an average of 60contracts a year, they represent a significant proportion of the population ofcontracts.The data set, 473 contracts, is a representative sample drawn from the

population of contracts that met the following criteria: the apprentice was a maleunder the age of 21 when he began his term and he was to learn a craft. Thecontract had to include the boy’s age and it had to have been notarized within thecity of Montreal (hence numerous notaries in the surrounding rural areas wereexcluded). The sample is estimated to represent at least half of the relevantpopulation.6 In absolute terms, the number of new apprentices hired per yearvaried with general economic conditions, and exhibited a slightly upward trendover the period between 1791 and 1820 (see Fig. 1). On a rough per capita basis,the number of new apprentices held its own because the city’s population grewslowly until at least 1815, when the level of immigration began a rapid ascent.7

In addition to being representative of apprenticeships in Montreal, these data

material, and notarial records) to reconstruct the leather craft industries in Montreal from 1790 to1829, indicates no other tacit training arrangements except those between father and son. Sheestimates that 16% of boys learned their craft from their father. It is possible that some of theseinformal arrangements were between other relatives, such as uncles and nephews.

5 Censuses conducted in 1825 and 1831 indicate that there were more men than women in Montreal.One hundred 15-year-olds, out of 7,000 males, represents 1.4% of the population of males, roughly thecurrent proportion.

6 See Hamilton (1995 and 1993, ch. 3) for details of the sample selection criteria and representative-ness of the sample, as compared to other Montreal samples. The sample appears representative inseveral respects: it mirrors year to year changes in the number of new apprenticeship contracts, and thecontract terms by craft are quite similar.

7 Population estimates for Montreal are sketchy before 1825. However, Donald Fyson (1989)reports estimates of various population assessments between 1813 and 1831, and Louise Decheˆne’sstudy of the seventeenth century (1992), includes a graph of population growth up to 1780. Both seriesare consistent with slow growth before 1815.

FIG. 1. Number of new contracts per year: Montreal, 1791–1820.N5 473. Source: ANQM.



probably also reflect conditions in the immediate surrounding areas, as many ofthe participants lived in the suburbs and other villages around Montreal.8

Moreover, apprenticeships in Quebec City appear to have been quite similar tothose in Montreal (Hardy and Ruddel, 1977). Comparison farther afield should bemade more cautiously. Poor records of apprenticeship in the American states andthe rest of Canada hinder such comparisons. That said, enough information isavailable to make a few generalizations. Apprenticeships throughout NorthAmerica seem to have been roughly similar, lasting about the same length of time,with boys earning a similar type and level of pay.9 In addition, craft guilds did notexist in Quebec or other parts of North America at this time. The legal system inthe rest of Canada and most American states, however, was based on Englishinstead of French law. I argue elsewhere that this may have influenced thecomposition of terms: American masters favored extra payments at the end of anapprenticeship more than tradesmen in Quebec, while Quebecois involved theboy’s parents more so than in the American case.10

The contracts are quite detailed and include information on the notary, theapprentice, the apprentice’s parents or guardian (sponsor), the master, as well asthe terms of their agreement. Contracts began by introducing the participants.Notaries typically described the sponsor and master by name, occupation, andresidence, and often reported the apprentice’s age. A description of the contract’sduration and start date followed (in some cases, the term began before the contractwas drawn up). Next came the obligations of the apprentice, the sponsor, andfinally the master. Contracts rarely contained information on the boy’s duties(they simply instructed him to obey all of the master’s ‘‘lawful’’ requests), butspecified in considerable detail the apprentice’s compensation. Finally, amend-ments, such as annulments, were annexed below the participants’ signatures (ormarks).One of the most notable characteristics of Montreal apprenticing agreements

was the surprising lack of variation in the level of compensation. Nearly allmasters agreed to support their apprentices, providing themwith basic necessities.With few exceptions, this meant that the boy would live with his master, and, inaddition to room and board, receive clothing or a clothing allowance.11 In somecases the amount of the clothing allowance rose as the term progressed, but

8 Montreal Island consisted of the city proper, enclosed by walls until around 1800, severalsurrounding surburbs orfaubourgswithin a few miles of the City’s markets (they are now consideredpart of the downtown area); further afield there were farms and several small villages.

9 See Lachance (1994), Quimby (1985), and Rorabaugh (1986).10 Hamilton (1995).11 Forty-two percent (200) of the contracts included some cash allowance. In almost all cases (92%)

boys received room and board, and the cash supplement was in lieu of clothing. There were a fewexceptions to the rule of basic necessities. Nine apprentices did not live with their masters (tworeceived no compensation, while seven received a cash allowance). Another 14 apprentices lived withtheir master but received neither clothing nor a clothing allowance. On the other hand, nineapprentices received a cash allowance in addition to room, board, and clothing.



overall, constant pay characterized 90% of the contracts.12 The only substantivesource of variation in pay came in an additional lump sum payment given toalmost half of the boys at the end of their apprenticeship. These ‘‘end’’ paymentsusually consisted of one complete suit of clothing (see Tables 1 and 2 forsummary statistics). There was also some variation in the level of nonpecuniarycompensation. For example, 16% of the apprentices received some extra educa-tion, which usually consisted of a few winters of evening school. Some were alsogiven permission to attend church, feast days, and classes before their firstcommunion. Clearly, with the exception of the end payment, apprentices inMontreal usually received a wage that varied little throughout their term or acrossboys.13 In contrast, boys contracted for terms of varying lengths. The averagecontract lasted 5 years, but terms as short as 3 and as long as 7 years werecommon.

II. A FRAMEWORK FOR ANALYSIS

The market for apprentices and masters in Montreal (and across NorthAmerica) appears to have been competitive. There were no unions or craft guilds,no formal certification process, and masters were not required to register anapprenticing agreement with the local municipality.14 Hence there were fewbarriers to becoming either an apprentice or a master. In addition, cities boastednumerous blacksmiths, shoemakers, and other craftsmen. In 1815 Montreal, forexample, over 100 masters were employed in the leather trades.15 Competition inthe labor market suggests that workers’ wages would have been commensuratewith their productivity. Because apprenticing contracts were lengthy, wages neednot have equaled productivity at each point in time. Competitiveness simplyensured that the discounted sum of wage payments over the course of theapprentice’s term would have equaled the discounted sum of the stream of thevalue of his productivity, less training costs

ot51

T wt

(11 r)t215 o

t51

T vt 2 ct

(11 r)t21, (1)

where T is the length of the contract, r is the discount rate, and for period t: wt isthe wage payment, vt is the value of the apprentice’s productivity, and ct

represents the master’s training costs (such as the opportunity cost of the time hespends teaching his apprentice, and away from his own work).The equilibrium condition described by Eq. 1 has several implications. For

12 Even the value of the clothing allowance exhibited little variation across contracts, with manyreceiving about £4 (current money of the province) per year.

13 The cost of basic necessities likely didn’t vary significantly between the ages of 15 and 20.Lindert (1978, pp. 347–352).

14Masters in some American jurisdictions were required to register apprenticing agreements whenthe apprentice was an orphan. See Rorabaugh (1986) for extensive references to data sources.

15 Burgess (1987, p. 270).



TABLE 1Variable Definitions

Variable Definition

Market characteristics

Contracts/Yr Number of new contracts per year.War of 1812 1 if year is 1812–1815.Decades 1 for relevant decade, 0 otherwise (1st5 1791–1800; 2nd5 1801–10,

3rd5 omitted category).Winter 1 if contract date included either December, January, or February.Spring 1 if either March, April, or May (omitted category).Summer 1 if either June, July, or August.Fall 1 if either September, October, or November.

Notary

Individual Notaries 1 if the designated notary drew up the contract (Chaboillez5 omitted).

Type of sponsor and location

Neighborhood 1 if both sponsor and master lived in the same neighborhood.Father 1 if the father alone sponsored his son (omitted category, which also

includes 4 contracts that contained no sponsor).Both Parents 1 if both parents acted as sponsors.Mother, Father absent 1 if the mother was the sponsor, because her husband was absent.Widow 1 if the mother was a widow.Guardian 1 if the sponsor was a guardian.

Master characteristics

Shop Size: (small;medium; large)

Small: 1 if master signed 1, 2, or 3 contracts in sample; Medium: 4, 5, or6; Large: 7, 8, 9, or 10 contracts (Small5 omitted category).

City 1 if the master’s shop was located in the City of Montreal.Occupations 1 if the designated craft, 0 otherwise.

Apprentice/contract terms

Age Apprentice’s age at the time the contract was signed (years).Sign 1 if signed, 0 otherwise.English 1 if the contract was penned in English, 0 otherwise (French).Probation Incidence (I): 1 if probation; 0 otherwise.

Duration (D) length of probation, in weeks (if incidence5 1).Duration Length of contract, in years (excluding probation period).Religion 1 if a ‘‘freedom to pursue religion’’ clause present.School 1 if an extra schooling clause present.No chores 1 if apprentice was not required to do household chores.Humanely 1 if master promised to treat his apprentice ‘‘humanely.’’Increasing pay 1 if apprentice received an allowance which increased during the term

(excluding end payments).Cash (constant) 1 if contract included a nonincreasing cash allowance.End pay 1 if an end pay was stipulated, 0 if not.Annulments 1 if contract annulled, 0 if not.

Note.Occupations: Hatter includes furriers; Baker includes candy and pastry makers; Blacksmithincludes gun and tin smiths; Woodworker includes carpenters and joiners,menuisier,and millwrights;Other25 goldsmiths, watch makers, printers, bookbinders, dyers of wool, hairdressers, wig makers,tobacconists, gardeners, painters, and potters; Other35 Other21 butchers.



example, the higher a boy’s productivity stream, training costs, and term lengthheld constant, the higher his wage stream. On the other hand, for a given stream ofwages and training costs, a more productive boy will receive a shorter term. Ingeneral, differences in training costs and a boy’s productivity stream would affectwages and term length.Whether wages adjusted more than term length, or vice versa, depended on

factors like the institutional structure of the industry. In England, for example, aminimum term length of seven years was legally imposed on masters andapprentices. Few contracts deviated from this rule.16On the other hand, these boysoften paid their masters a fee, which varied across contracts. Market forces appearto have determined the value of the fee, as apprentice notaries paid much morethan boys training in carpentry.17 In Montreal there was no legal restriction onterm length. Because masters smoothed apprentices’ compensation, which cov-ered little besides basic necessities, the variation in boys’ productivity andmasters’ training costs was manifest in contract length. Apprenticeship duration,as noted above, varied substantially across boys.Figure 2 illustrates that the sum of a stream of a boy’s net value—his value of

16Merson (1968) compiled hundreds of apprenticeship registrations from seventeenth-centurySouthampton, and Graham (1987) completes a similar task for Oxford. Both indicate apprenticeshiplength.

17 Campbell (1747) provides information on masters’ fees across crafts.

TABLE 2Summary Statistics (N5 473)

Market characteristicsType of sponsorand location Craft distribution Apprentice/contract terms

Contracts/Yr 19.57 (6.16) Neighborhood 0.31 Woodworker 0.18 Age 14.84 (2.38)War of 1812 0.15 Father 0.66 Hatter 0.06 Age Squared 225.96 (67.29)First decade 0.25 Both parents 0.09 Tailor 0.07 Sign 0.19Second decade 0.39 Mother, Father absent 0.04 Baker 0.05 English 0.24Third decade 0.36 Widow 0.15 Butcher 0.03 Probation (I) 0.34Winter 0.23 Guardian 0.05 Mason 0.03 Probation (D) 11.76 (15.64)Spring 0.26 No sponsor 0.01 Blacksmith 0.11 Duration 5.32 (2.39)

Summer 0.26 Master Characteristics Saddler 0.05 Religion 0.23Fall

Notary

ChaboillezLukinDelisleDesautelsDoucet

0.25

0.460.120.100.290.03

SmallMediumLargeCity

0.760.180.060.48

ShoemakerTannerCooperOther2

0.170.040.130.08

SchoolNo choresHumaneIncreasing payCash (constant)End payAnnulments

0.160.040.140.100.320.480.15

Source.ANQM.Note.Means reported, standard deviations in brackets (for continuous variables). See Table 1 for

definitions. Sample size for Neighborhood & City is 434, due to omitted observations. Probation (D)reports the mean duration for those contracts with probations (I 5 1).



marginal product net of training costs—would equate over a shorter period to thesum of a stream of wage payments when the boy’s stream of net values washigher. Hence a more productive boy, or a master with lower training costs, wouldsign up for a shorter term (T instead of T8 in Fig. 2). The figure also illustrates thatif a boy’s productivity increased during his apprenticeship while his wagesremained roughly constant, his wage would initially exceed his net value, but hewould earn less than his worth at the end of this term.18 Unless leaving part waythrough the term was sufficiently costly, apprentices may have been better offquitting early or shirking. If, for example, they could earn a wage equal to their netvalue at each point in time in another job, they would be best off leaving as soonas their net worth exceeded their apprenticing wage.19 Without enforcement,masters would have more sensibly responded to variation in productivity byoffering wages that better matched productivity at each point in time.Enforcement mechanisms, however, were a significant component of contracts

in this period. Legally, apprentices could be compelled to fulfill whatever termsthey established in a written contract.20 By implication, they were not allowed to

18More accurately, the relationship between compensation and the apprentice’s per period valuealso depends on the distribution of training costs during the contract. For example, if most trainingoccurred during the latter part of the apprenticeship, the difference between pay and worth at the end ofthe term would have been smaller.

19 The maximum net benefit from quitting depends on the apprentice’s alternate worth. Alternateworth depended on the job a boy planned to take if he quit. For example, if he did not train in a secondjob, training costs would not have affected his outside worth.

20 Although Quebec was under British rule by the end of the eighteenth century, the Statute ofArtificers (that dictated the 7 year minimum term for all apprentices) was not in force. French lawdictated in civil matters, while British law applied to criminal cases. Local statutes, in turn, supersededthe applicable laws of both France and England. Statutes directed toward apprentices were fashionedin Montreal in the late-eighteenth century. In general, these laws did not impose uniform conditions on

FIG. 2. Contract duration: a function of the per period net value and wage.



quit. ‘‘Deserters,’’ if caught, could face a jail term, a fine, and be returned to theirmaster to complete their apprenticeship. In addition to court enforcement (whichwas observed in some form throughout North America), apprentices in Montrealwere sponsored by an adult, usually their parent or guardian. Most of the timethese sponsors were explicitly liable in cases where the apprentice did not fulfillthe terms of the agreement. In many cases this took the form of parents agreeing tosearch for and return apprentices who ‘‘absented’’ themselves from their master’sservice. As I argue elsewhere, neither enforcement nor desertion was a significantproblem for Montreal masters at the turn of the nineteenth century.21 With thesevarious means of enforcement at their disposal, masters would have been able tooffer room, board, and clothing to their apprentices (a constant wage), and varyterm length according to their apprentice’s productivity stream and their owntraining costs.While these simple scenarios may describe the basic mechanics of the Montreal

apprenticeship, the reality was more complex. When bargaining over term length,masters and boys (or their parents) had to make an assessment of a boy’s expectedstream of future productivities. Incomplete information undoubtedly plagued theassessment of an apprentice’s contribution to his productivity.22 For example,masters (and boys themselves) were likely unsure of a boy’s true ability. Futurephysical attributes may have been at least partially observable, but most of thetime prospective apprentices were attempting their first job, hence neither partywould have been sure of a candidate’s aptitude for any given craft. Quite apartfrom ability, a boy also might not have known whether he would enjoy working ina particular trade. Furthermore, the two would not have known whether theywould enjoy each other’s company. The chemistry of their relationship (‘‘match’’quality) could have had a substantial effect on both the master’s and the boy’sproductivity.23 Finally, masters would not have known a candidate’s predisposi-tion toward deserting, or his work habits. While a candidate’s penchant forrunning away, and effort he expended at work, could have been influenced by

apprentices, but sought to uphold and strengthen the validity of written agreements. They dictated, forexample, that anyone who had legally entered an agreement (before notary publics or witnesses) couldbe ‘‘compelled to perform the covenants agreed upon.’’ To this end, the statutes were concernedmainly with sanctions for contract breaches on the part of the master or apprentice. SeeRules andRegulations of Police for the City and Suburbs of Montreal(1817), p. 138.

21 See Hamilton (1995).22 Uncertainty also may have existed on the apprentice’s side. For example, if a master’s or his

craft’s expected contribution to a boy’s productivity was unclear, and this led the boy to assume theexpected contribution was either smaller or larger than its actual contribution, term length should havebeen affected. Difficulties of this particular sort, however, seem unlikely here. Masters were usuallyestablished members of the community, their reputations for craftsmanship, and also as employers,well known. One way to confirm this conjecture would be to gather information on how long eachmaster had been in business. Unfortunately, this is not possible with the current data set.

23 There is a large literature on the importance of ‘‘match’’quality in employment relationships. See,for example, Siow and O’Flaherty (1992), Devine and Kiefer (1991), Mortenson (1986), Jovanovic(1979), and Johnson (1978).



contract terms (altering the value of an end payment or the sum of money parents’forfeited if their child defaulted, for example), it would be more difficult to affecta boy’s ability or the chemistry of the relationship by these means.24

Prior information about match quality likely affected a master’s expectations,and contract length, in a particular way. To explain, consider the following simplemodel (refer to Fig. 3). Imagine there are two types of workers, good and bad.True productivity isVg, for good workers, andVb for bad workers. Good workersare those with higher ability, higher effort and a lower predisposition towarddeserting. Bad workers are not good enough to be retained—once a masterdiscovers he has hired a bad worker, he fires him. Masters do not know whether acandidate is bad or good. At the time of hiring they observe a signal of the boy’sproductivity. The distribution of signals is symmetric around each of the respec-tive true productivities (good and bad), and its dispersion (for each type) varieswith the amount of information the master possesses (in Fig. 3, the distribution ofsignals has a higher variance in the poorly informed case). In other words, the

24 The issue of a master’s response to the possibility that his apprentice might desert is dealt with inHamilton (1995), which demonstrates that contract terms varied systematically across contracts, in amanner consistent with the notion that masters’ responded to apprentices’ threat of desertion.

FIG. 3. Distribution of productivity signals. (A) Poorly informed, (B) better informed.



signals are noisier when masters have less precise information. If masters use acut-off criterion—they will not hire anyone with a signal of productivity belowV—they will hire more bad workers when they are less informed.25 In Fig. 3 this isindicated by the fact that the shaded area is larger in the top panel than in thebottom panel (the shaded areas represent the proportion of all bad workers hired).Since all bad workers are fired once their true quality is revealed, the probabilityof hiring a bad worker, the ‘‘failure’’ rate, is higher when masters are lessinformed.26

As a consequence, a ‘‘new hire’s’’ expected productivity stream, for a givensignal of productivity, should depend on the information available to the master.This occurs because a boy’s expected per period productivity is the weightedaverage of the good and bad productivities, where the probabilities of each statecomprise the weights. Thus for a given signal that exceeds the minimumacceptable signal,V (hence in cases where a contract is drafted), masters who areless informed will expect a lower per period productivity from their apprenticebecause of the higher probability of hiring a bad worker. These masters, therefore,should demand longer terms from their apprentices.There are indications in these contracts that parties were not always well

informed. For example, 15% of the contracts were annulled. This typicallyoccurred within the first two years of the apprenticeship (24% of all annulmentsoccurred within the first year of a contract, 61% occurred within the first twoyears, and 79% occurred within the first 3 years). Although explanations wererarely provided, it seems likely that information revealed about the apprentice(and master) caused the majority of these early separations.27

25 Clearly in a more sensible, and complex, model the cut-off criterion would depend on thedispersion in the signals of productivity. How the cut-off level would vary, however, is notunambiguous. If the master raised the cut-off, allowing him to be more particular, he would incurhigher costs associated with a longer search process, but he would end up making fewer mistakes (i.e.,hire fewer bad workers).

26 In the top panel, for example, the probability of being bad is the proportion of boys hired who arebad:

Pb 5

eV

`

f(Vb) dVb

eV

`

f(Vb) dVb 1 eV

`

f(Vg) dVg

.

When the variance of the distribution of signals is smaller, as in the lower panel, the proportion of badworkers hired (represented in the numerator) is smaller, while the proportion of good workers hired(the right-hand term in the denominator) is larger. In this simple illustration, the denominator isindependent of the variance in signals (the increase in the proportion of good boys hired exactly offsetsthe decrease in the proportion of bad boys hired). Hence the probability of hiring a bad worker fallswhen masters are better informed.

27 High turnover rates are currently common among youth, where it is often argued that a lack of jobexperience leads to a higher frequency of poor ‘‘matches’’ between employees and employers, andthus high separation rates and short job tenures. See, for example, Biddle and Roberts (1994) andAltonji and Shakotko (1987).



While one recourse to information deficiencies was (presumably) increasingthe length of apprenticeship and accepting a higher chance of failure, badapprentice–master matches were costly, because each party could have beenemploying (or be employed by) someone else who may have been (made them)more productive. When a higher failure rate and a longer term was not the mostefficient option, masters could instead try to mitigate the information problem.This solution was adopted in different forms, and to varying degrees, by theparticipants in Montreal.In one-third of the contracts, the parties actively sought to learn more about

each otherbeforesetting down contract terms. This took the form of a probation-ary period, which, on average, lasted 12 weeks.28More than half were shorter thanthis, but a few were very long, not ending for more than a year. During aprobation, the two parties could gain information before deciding whether tocommit to a long term relationship and, if so, before setting down the terms oftheir contract. Masters would not have retained poorly suited apprentices (subse-quently referred to as the ‘‘learning’’ effect) and, if the probation was successful,they would have been able to better tailor contract terms to the individual (calledthe ‘‘tailoring’’ effect). In effect, a probation serves the purpose of moving anill-informed master from the top panel to the lower panel in Fig. 3. Hence, all elseconstant, in contracts that began with a probation there should have been a lowerprobability of failure and apprentices should have had a higher expected perperiod productivity; or empirically, if probations were randomly assigned acrossapprenticeships, contracts with probations should exhibit a lower annulment rateand shorter duration.Before continuing, the definition of duration must be clarified. Duration can be

measured either from the date of the contract (‘‘contract length’’), or from thebeginning of the probation (‘‘total time served’’ or ‘‘total duration’’). Eachmeasure has both advantages and disadvantages. The theoretical prediction is thatat the time of contracting those who had a probation, regardless of its length, nowhave relatively more precise information about match quality (assuming randomassignment of probations—an issue examined below). Thus contract lengthshould have been shorter in these cases. Whether total time served was alsoshorter depends on the assignment of probations, and the amount of informationacquired and whether apprentices acquired skill during the probation. If, forexample, training was delayed during a probation, total duration need not havebeen shorter in these contracts. It likely was shorter, though, because participantswould not otherwise choose to bear the cost of a probation. Certainly a strong testof the effectiveness of probations would be to observe shorter total duration inthese contracts.Other considerations, however, make the argument for total duration less

compelling. Contract length, apprentice’s age, and contract terms should be

28 Probations were evident in the contracts when the date at which the apprenticeship began(recorded in the body of the contract) preceded the date the contract was constructed.



calibrated from the date at which all of these conditions were established—thecontracting date. The purpose of the exercise is to determine how characteristicsand terms known and established at the time of contracting affected contractlength. Apprenticeship terms that would have been assigned had a contract beendrawn up at the beginning of a probation are unknown. Thus to estimate thedeterminants of duration, the dependent variable should be defined as contractlength (excluding the probation period), with probation incidence and probationduration serving as explanatory variables. As a check on the inference thatprobations were an effective means of acquiring information, however, regres-sions that use total time served as the dependent variable are also estimated.Whether the parties of contracts that included a probation were,on average,

better informed when the contract was constructed depends on whether proba-tions were assigned more often in cases of relatively poor or good initialinformation. Certainly, if probations were randomly distributed across individu-als, contracts with probations should contain more precise information on thematch quality and a boy’s ability than those where terms were set downimmediately. Therefore term length should have been shorter, and the proportionof failures lower in those cases where learning and tailoring occurred (note that allreferences to length refer to contract duration unless ‘‘total’’ length is explicitlyindicated). If, instead, probations were employed more often in situations whereinitial information was low, the average length of contracts with probations couldbe either higher or lower than in the sample of contracts with no probations. Theprediction concerning failures would be similarly ambiguous. Finally, if relativelywell-informed people disproportionately employed probation periods, shorterterms in probation contracts might arise from a selection effect as opposed tosubsequent tailoring and learning. Similarly, a lower failure probability mightarise in this case because of the bias in the initial assignment toward alreadywell-informed people, instead of from learning and tailoring.The data suggest that probations were assigned randomly and, furthermore, that

contracts that began with probations contained (on average) better informedparticipants. This inference is based on a test of the hypothesis that if probationswere randomly assigned the probability of annulment in short probations (wherelittle learning and weeding would occur) should have been similar to theannulment rate in no-probation contracts. To test this hypothesis, regressionanalysis of the determinants of the annulment probability is performed, using(among other variables) the incidence and duration of probation as regressors.While space constraints prohibit reproduction of the results, for the typicalparticipant: (1) the probability of annulment was significantly lower in contractswith a probation of average length, (2) the annulment probability was lower, thelonger the probation, and (3) the chance of annulment was twice as high incontracts with very short probations (1 to 2 weeks) compared to contracts withoutprobations.29 In this last result, however, the parameter estimates are not always

29 The results are available in an earlier working paper (1994), or by request.



statistically significant, and therefore the most plausible interpretation is thatprobations were randomly assigned. On the other hand, as the sign of theincidence parameter is consistent across specifications, and statistically signifi-cant in some cases, the use of probations in poorly informed cases is at leastsuggested. The other results indicate that participants in contracts that began witha probation were, on average, better informed than parties to contracts withoutprobations. Probations appear to have been an effective means of gathering usefulinformation about match quality. Together these results suggest that the relation-ship between probations and contract duration (or, more strongly put, time served)will be negative. Both relationships are explored in the next section.Before turning to the determinants of contract length, the preceding discussion

raises a few questions about peoples’ incentive to reduce information problemsbefore signing a long-term contract. For example, if probations successfullyrevealed information about the suitability of the employment match, why werethey not assigned in all cases? First, the proportion may be significantly higherthan one third, as the sample includes only successful probations.30 Second,probations were not costless. Boys had to be monitored, perhaps closely, as themaster tried to learn more about the candidate. A master also may have had tohouse candidates during their trial period. If they could house or monitor only oneboy at a time, they would forgo the opportunity to monitor a different boy. Forsome boys, perhaps the very young, little information would have been revealedfor a fairly lengthy period of time, making a probation untenable. In fact, no(successful) probations were observed among boys starting under the age of 12.It also seems unlikely that probations were the only means of ensuring a better

informed match. Participants may have relied on local information networks orneighborhoods (an hypothesis explored below). Another way to reduce the riskassociated with employing someone of uncertain ability was to rely on intermedi-aries who knew more about both masters and potential apprentices. Notaries mayhave served this purpose (as they did in medieval French credit markets—seeRosenthal (1993)). This data set is not well suited to address this question, in partbecause the selection criteria focus attention on particular notaries instead of theactivities of individuals. This is a problem because a few sponsors signed morethan one apprenticeship contract, making it difficult to determine the proportionthat exhibited loyalty to a notary. A sample based on individual activity would beable to determine whether masters and sponsors that used the same notary weremore likely to sign an apprenticeship contract. These data do show, however, thata large majority of masters who signed more than one contract retained the samenotary. For example, 79 of the 100 masters who had more than one contract in thesample retained one notary for more than half of their contracts. Sixty-tworetained a single ‘‘family’’ notary for each contract in this sample.31 On the

30 I can see no way to gauge the number of unsuccessful probations with these data.31 This proportion is higher than a random allocation of second contracts across notaries. The

distribution of contracts by notary (from largest to smallest) is: 46.3, 28.8, 11.6, 10.4, and 3.0%. If the



apprentice’s side, there were more than 400 different sponsors, and only 41appeared in more than one contract.32 Thirty-one of the 41 retained the samenotary for all of their transactions. Therefore these data suggest that those whosigned more than one contract did exhibit some notary loyalty, but, on the otherhand, the majority of masters and sponsors signed just one contract (there were276 different masters). Once again, though, the sample captures only a small partof an individual’s business with a notary.

III. EMPIRICAL ANALYSIS

The preceding discussion suggests observable characteristics of the apprenticeand master should have been systematically related to apprenticeship duration.Measures of how well informed the parties were about each other’s contributionto their employment relationship also should have mattered. This section beginswith a discussion of the predicted relationship between observable characteristicsand duration, and then turns to an evaluation of these predictions with multivari-ate regression techniques.The competitiveness of the market should have ensured that, over the life of the

contract, the (discounted) sum of the stream of an apprentice’s expected value ofproductivity (net of training costs) should have equaled the (discounted) sum ofper period compensation.33 Hence term length should have varied positively withthe value of compensation and training costs across contracts and negatively withexpected productivity across boys. In examining the characteristics of compensa-tion, both pecuniary and nonpecuniary factors should be taken into account. Forexample, allowing a boy to attend religion classes (and thus enjoy more time awayfrom the shop than other boys) should have increased term length. A similarargument may apply for extra schooling, despite the fact that schooling may haveraised a boy’s productivity. Reading and writing are skills that would haveaffected a boy’s productivity, independent of his master (general human capital),thus apprentices ultimately should have paid for them.34 In addition, schooling notonly involved time off for lessons, but in many cases, the master either paid all orhalf of the tuition costs. Finally, pecuniary differences, such as end payments, alsomay have reflected a different level of pay, and hence required a different termlength.35

Controlling for compensation, a boy’s characteristics should have influencedboth parties’ estimate of his expected per period productivity. A few attributes that

100 second contracts were randomly allocated (but the distribution of contracts by notary wasretained) roughly 31% of the masters would have ‘‘retained’’ the same notary.

32Most had two contracts, but a few had 3 or 4, for a total of 86 contracts.33 Discounting is ignored here. Since it would affect both the present value of the stream of

compensation and productivity, this omission is unlikely to alter the direction, or even the magnitude,of the relationship between the variation in length and productivity, net of compensation.

34 See Becker (1975).35Whether or not pay was actually higher when an end payment was present would depend, in part,

on the level of compensation during the term.



may have been correlated with a boy’s productivity are observable. Age is one.Apprentices who began their terms at a relatively young age were probablyinitially less productive than other boys. The average candidate began at age 15,but starting ages as young as 7 were observed. At the other extreme, a few waiteduntil they were almost 21 years old. As is evident in Fig. 4 (illustrating thedistribution of term lengths across different starting ages), these two variableswere strongly, negatively related. The strength of this relationship arises partlyfrom the practice of ending an apprenticeship when a boy turned 21, true foralmost half of the contracts here. Twenty-one was the age of majority, and the ageat which sponsors could no longer be held legally responsible for their charge’sactions.36 One other trait identifiable in the contracts is the presence of a boy’ssignature. Candidates capable of signing their name may have been moreproductive, and hence received shorter terms. Other factors the parties couldobserve, like the apprentice’s size and dexterity, should have affected contractlength but they are not measured in this data set.The parties’ expectations concerning per period productivity would have been

determined by the level of information existing at the time the contract wasdrafted. The analysis of annulment behavior, reported above, indicates thatprobations were associated with better informedmatches, and are thus expected tobe negatively correlated with duration. Probations alone, however, did not resolveall of the information difficulties. The remaining uncertainty should bemanifest incharacteristics correlated with participants’ prior level of information. For ex-ample, the type of sponsor may have mattered. Apprentices’ fathers or both

36Custom also may have played a role. Contracts in England were not to end before an apprentice’stwenty-first birthday. In Montreal, however, there were no local by-laws specifying either a minimumor maximum terminal age.

FIG. 4. Distribution of duration, by starting age. The means and standard deviations are calculatedfor 13 age groups, covering ages 8 through 20. A contract belonged to the group of 8-year-olds, forexample, if 7.5# age, 8.5 years at the time the contract was notarized. Source: ANQM.



parents usually accompanied their sons, but when the parents were unavailable(either through death, incompetence, or because they did not live near Montreal),a legal guardian was appointed to protect the child’s interests. Boys who wereaccompanied to the notary’s office by a guardian were less likely to be acquaintedwith the master.37 In addition, a dummy variable for contracts where both partieswere from the same neighborhood is included as a regressor, because physicalproximity may be positively correlated with prior acquaintance.38

A third factor, a master’s influence on an apprentice’s value, also may haveinfluenced term length. Some masters may have been better than others—bettercraftsmen and better teachers. Training costs under ‘‘good’’ masters (in part, theforgone value of themaster’s time) would have been higher, and hence apprentice-ships longer. While a good measure of a master’s quality is not available, tworough proxies may yield some information. First, the number of contracts eachmaster signed may be correlated with their status. Presumably, masters who hiredmore apprentices ran relatively large shops. These men also may have had a highrank in their profession’s hierarchy, and thus may have been able to extract longerterms.39 In this sample, there were 279 different masters. They signed anywherefrom 1 to 10 contracts, with most (83%) signing one or two. Only 12 masterssigned more than 4 contracts. Cursory examination of the data does not reveal aconsistent relationship between length (adjusted for mean age differences) and thenumber of contracts a master signed, although the longest durations are clusteredwith the large masters.40Second, contracts involving masters from the city,ceterisparibus,may have been longer because of their access to a larger market andpresumably higher incomes.41 Access to the port may have been particularlyimportant for some trades, such as coopering. In roughly half of the contracts, themasters resided in the city.A master’s influence on an apprentice’s productivity may have arisen not only

from his own abilities, but also through his craft. Some trades were undoubtedlymore lucrative than others, and thus may have been able to demand longer termsfrom their apprentices. While there is little direct evidence of the ranking of craftsin Montreal, information on masters’ fees in England may offer some insight. InEngland, apprentices paid their masters a fee at the beginning of their term. These

37Guardians appeared in 5% of the contracts.38 In many cases where the two parties resided in the same neighborhood, their homes were located

(perhaps vaguely) in ‘‘Montreal’’ or, more specifically, ‘‘in the city’’. The rest tended to occur in thesuburbs, or in the locations of tanneries (along rivers just outside of the suburbs).

40 The average adjusted length for masters with less than 5 contracts is 5.6 years; it is 5.8 years formasters with at least 5 contracts.

41 Not all of the contracts contained a reference to the master’s location. Including a ‘‘city’’ dummyvariable reduces the sample (473 observations) by 9. The information given in the contracts mayover-represent the true proportion of masters living in the city (about half) because some notariesappear to have recorded location imprecisely. In some cases, notaries wrote simply ‘‘Montreal’’ or ‘‘ofthis place,’’ and a few times ‘‘Montreal’’ was typeset on the contract form. In most cases, though, thecontract contained a more particular geographic reference—a street in the city, or neighborhoodoutside the city.



fees, instead of term length, varied across occupations, with the more lucrativecommanding higher fees. The fees for a master house painter, a trade whichprovided ‘‘poor and precarious Bread’’ and contained ‘‘the dirtiest, laziest, andmost debauched [ journeymen] that are of any Trade in and aboutLondon’’ werebetween £5 and £10, while those for a banker were much higher, ranging from£50 to £300 (see Table 3).42 If mid-eighteenth-century England is any indication,lucrative crafts would include goldsmithing, while relatively lowly crafts were thebutchering and masonry trades.43Duration should have varied accordingly.Finally, various details of the contracts are also included to capture any

remaining heterogeneity. For example, several variables are designed to capturegeneral economic and labor market conditions. These include a dummy variablefor contracts initiated during the period of the War of 1812 to capture any effectsof army recruiting, or any turbulence in the labor market associated with thisevent. Decade and quarter dummy variables are included to capture cyclical and

42 These fees were quite large.At the time a journeyman baker earned just 5 or 6 shillings a week, orabout £14 a year. Campbell (1747, p. 182 and p. 276).

43Market conditions, however, may have been very different in Montreal, which would call intoquestion the validity of the English ranking of crafts.

TABLE 3Masters’ Fees in London, 1747: A Partial Reproduction of a Table Provided in R. Campbell,

The London Tradesman,(1747)

Names of trades

Sums givenwith an

apprentice (£’s)

Butcher 1 to 10Breeches Maker, Gardener, Hatter, Mason, Painters of Houses, Smith forLocks, Taylor, Tanner 5 to 10

Baker, Bookbinder, Bricklayer, Shoemaker, Smith for Guns, Tweezer Maker 5 to 20Cabinet Maker, Carver of Houses, Carpenter of Houses, Coopers, Gunsmith,Joiner, Pastry Cook, Tin-man 10 to 20

Armourer 15 to 20Watch Maker 10 to 30Printer of Books 5 to 40Confectioner 10 to 40Saddler 20 to 30Furrier (Skinner), Wine-Cooper 10 to 50Goldsmith 20 to 50Grocer, Surgeon 20 to 100Ironmonger, Tobacconist 30 to 100Insurer or Underwriter, Notary Public 50 to 100Apothecary, Attorney 20 to 200Money Scrivener 50 to 200Banker 50 to 300

Source.R. Campbell (1747, 331–340).



seasonal effects. A variable measuring the number of new contracts signed peryear, which appears to have moved pro-cyclically, is also included (see Fig. 1 andHamilton (1993), ch. 3), as are notary effects, and a dummy variable for thelanguage of the contract.Table 1 describes all of the variables included in the regressions, and the

omitted categories. The results of regressing contract duration on these variablesare reported in Table 4. Two versions of the regression are presented. In the firstcolumn, contract terms are excluded, as they may be considered endogenousregressors.44The results for most of the other variables are robust to this change inspecification (an exception, the coefficient of the English variable, is notedbelow). The city and nieghborhood variables are included, restricting the sampleto 434 observations (not all of the contracts contained location information).Omitting the location variables (raising the sample to 473) does not substantivelyalter the results.The results reveal that probations are associated with significantly shorter

contracts, an effect captured by the incidence variable. The incidence coefficient(roughly 0.5) indicates that, taking account of all other variables specified in theregression, contracts with probations were, on average, about half a year shorter.Probation length, on the other hand, does not appear to affect contract duration. Inother words, contracts with very long probations did not yield systematicallymore (or less) informed matches than those with shorter probations. This mayreflect the fact that when initial information was relatively poor, a longerprobation ensued. Hence agreements that began with probations contained(uniformly) better informed participants than those without probations.As discussed earlier, the existence of a negative relationship between contract

length and the incidence of probations lends credence to the notion that probationsprovided information, but stronger evidence lies in their effect on total timeserved. If probations were randomly assigned, and trial periods did not delaytraining, total time served (probation length plus contract length) should havebeen shorter. This can be tested by redefining the dependent variable as total timeserved, omitting probation length from the set of regressors, and redefiningapprentices’ age to correspond to the beginning of the probation period. Theresults for this new specification (not shown) indicate that boys who signedcontracts that began with a trial period served less time. The coefficient on theincidence of probation variable is not much smaller than in the previous results:the total time served in contracts with probations (compared to those withoutprobations) was, on average, a bit less than half a year shorter.45 This result

44 They are endogenous in the sense that if all terms were determined simultaneously, duration maybe a function of whether an end payment was going to be provided, but also the provision of endpayments was a function of duration. They are included in the second column because the correlationbetween length and other contract terms (if not the causality) is of interest.

45When contract terms are excluded from the regression, the probation incidence coefficient is20.477 and significant at the 1% level (thet-statistic is23.79). When contract terms are included, thecoefficient is20.384 and thet-statistic is23.02. Except for the changes noted above, the specificationis as illustrated in Table 4. The other results are robust to this change.



TABLE 4Determinants of Contract Length

Explanatory variables

Column 1 Column 2

Coefficient (std. error) Coefficient (std. error)

Probation (incidence) 20.586*** (0.146) 20.531*** (0.146)Probation (length) 0.003 (0.006) 0.006 (0.006)

Contracts/Yr 20.004 (0.009) 20.005 (0.009)War of 1812 0.088 (0.190) 20.016 (0.189)Winter 20.215 (0.158) 20.222 (0.157)Summer 0.081 (0.151) 0.086 (0.149)Fall 20.300** (0.152) 20.268* (0.152)Age 22.033*** (0.193) 22.039*** (0.193)Age Squared 0.043*** (0.007) 0.045*** (0.007)Sign 20.195 (0.158) 20.185 (0.156)English 0.329** (0.165) 0.140 (0.172)

Both Parents 0.320 (0.212) 0.257 (0.210)Mother, Father absent 0.488** (0.329) 0.591* (0.324)Widow 20.001 (0.152) 20.041 (0.150)Guardian 0.613** (0.250) 0.518** (0.248)Neighborhood 20.022 (0.125) 0.015 (0.124)

Hatter 20.119 (0.280) 20.282 (0.283)Tailor 20.256 (0.268) 20.331 (0.263)Baker 20.422 (0.267) 20.492* (0.268)Butcher 20.481 (0.333) 20.659** (0.332)Mason 20.615* (0.330) 20.762** (0.336)Blacksmith 0.00001 (0.208) 20.080 (0.207)Saddler 20.631*** (0.293) 20.755*** (0.293)Shoemaker 20.580*** (0.190) 20.673*** (0.194)Tanner 20.635*** (0.296) 20.701** (0.293)Cooper 20.251 (0.234) 20.248 (0.234)Other2 20.134 (0.255) 20.138 (0.255)Medium 20.058 (0.144) 20.071 (0.142)Large 0.166 (0.299) 0.175 (0.294)City 0.670*** (0.135) 0.638*** (0.134)

Religion 0.284** (0.138)School 0.490*** (0.175)No chores 20.288 (0.258)Humane 0.093 (0.201)Increasing pay 20.116 (0.212)Cash (constant) 20.149 (0.150)End pay 0.243* (0.146)Constant 26.055*** (1.390) 25.662*** (1.401)

LLF 2632.3 2618.6R-squared 0.807 0.819AdjustedR-squared 0.789 0.799

N 434 434

Note. The dependent variable is the duration of the contract, measured in years. Method ofEstimation: OLS. Notary and Decade effects are not reported (none of the coefficients are statisticallysignificant). *, **, *** indicates statistically significant coefficients at the 0.1, 0.05, and 0.01 levels,respectively. For definitions, see Table 1.


suggests that contracts with probations contained better informed participants,and indicates that this difference appreciably reduced the total duration of anapprenticeship.The coefficients on many of the human capital variables, such as age, are

statistically significant. The relationship between age and duration is nonlinear,with contracts becoming increasingly long, the younger the apprentice. Youngboys were less experienced, less mature and thus undoubtedly less productive. Inaddition, it is possible that information about a boy’s true quality may have beendisproportionately poor for very young boys.46 Differences in compensation alsomattered in predictable ways: religion, schooling, and end pay clauses all added tothe length of an apprentice’s contract. All else equal, the right to attend church, forexample, added about 3 months to a typical boy’s contract. This effect may havehad more to do with prejudice than extra time off, however, because these clauseswere more often included when the master’s and sponsor’s families followeddifferent religions. The English dummy variable (representing contracts drawn upin English) is positive and significant. This is largely due to differences in Frenchversus English contract terms: the effect is not significant and smaller when theseterms are included as regressors.The estimates also reveal that contracts in the leather trades were significantly

shorter than those in woodworking (the omitted category), regardless of themodel’s specification. When controlling for contract terms, bakers, butchers, andmasons also served relatively short terms. For several of these crafts, especiallythe latter group, this effect is consistent with Campbell’s ranking of eighteenth-century English crafts—woodworkers received higher fees than butchers, which,in a situation without fees, should translate into relatively long contracts. Thisranking does not explain, on the other hand, why all of the leather crafts wereconsistently shorter than woodworking; saddlery, relative to tanning, was consid-ered a sophisticated trade. One possible explanation for this result is that theleather crafts made more use of neighborhood connections. Most of these masterswere concentrated in tannery villages just outside of Montreal. Cursory examina-tion of the data suggests that an unusually high proportion of their apprenticeswere drawn from their master’s own (small) neighborhoods. To test this hypoth-esis, the contract length regressions were rerun with additional sets of interactionsbetween the craft and neighborhood dummy variables and craft and city dummyvariables. TheF-test reveals that the interactions were marginally significant atthe 5% level (F22,3685 1.58). Also, most of the interactions with the leather tradeswere individually significant, suggesting that when these masters and apprentices

46 Because starting age is correlated with (successful) probations, it is possible that the probationeffect may simply reflect the negative relationship between starting age and duration instead of therelationship between probations and duration (if the age effect has not been controlled for adequately).The results in Table 4 are, however, robust to specifications that attempt to capture any remainingcorrelation between age and probation. I have, for example, also included an interaction between ageand the incidence of probation but the parameter on the interaction is insignificant, and the estimates ofother coefficients are unaffected.



were from the same neighborhood, contract durations were shorter, but thatleather tradesmen in the city contracted for longer terms. The leather trades doappear to have been unique in these respects, as the interactions were insignificantfor all other trades.47 Finally, information effects are also evident in the estimatedcoefficient on the guardian variable. As expected, apprentices sponsored by aguardian served longer terms.48

Few labor market variables were significantly correlated with contract dura-tion. Duration did not change over time, with the cyclical movements in theeconomy, or with the War of 1812.49 The latter results does not necessarily meanthat the trade blockades associated with the war had little effect on Montreal’seconomy, but, rather than in the length of apprenticeship, the impact may haveappeared in such variables as the number of new contracts signed. Those inimport-competing trades: fur hats or clothing, signed upmore boys during the waryears (1812–1815), relative to their share over the entire 30 year period; whilecoopers and carpenters fared rather poorly.50

Finally, Table 4 also shows that apprenticeships were shorter among contractssigned in the fall months. This mirrors findings in some of the indentured servantliterature, where the effect has been attributed to lower fall shipping costs.51 Iflower costs increased the supply of competing apprentice candidates, however,there would have been upward pressure on the length of the contracts. InMontreal, seasonally high demand for masters’ products may have outweighedlabor supply effects, leading to shorter fall terms. Coopers, for example, may haveexperienced greater demand for their barrels during the harvest.

47While the unique characteristics of the leather industry’s location may have facilitated a master’suse of neighborhood connections, the insignificant effects for other crafts may arise because ofreporting inaccuracies.The leather contracts typically reported precise locations for both the masterand sponsor. For other trades, a higher proportion of the contracts simply reported Montreal for eitherparty’s location. This also may explain why the neighborhood coefficient is insignificant in Table 4,where the craft dummy variables were not interacted with the location variables.

48 Interestingly, boys whose mothers represented them, when their fathers were absent, also servedlonger. There are numerous possible explanations for this effect, none of which can be substantiated.For example, these women, unlike widows, may have been unaccustomed to bargaining. Theyconsequently bargained poorly, their sons ending up with long terms. On the other hand, these womenmay have been particularly anxious to relieve themselves of the burden of their sons—their lesscompetitive position translating into a relatively long term. Third, they may have had less wealth withwhich to insure masters against the possibility of their sons defaulting.

49 The insignificant result holds whether the war dummy covers the years 1812 to 1815, starts withthe initial blockade (1807–1815), or is redefined to allow for craft specific differences (in other words,interacting the war and craft dummy variables yields insignificant results).

50 Hatters, for example, composed 6% of the contracts signed between 1791 and 1820, but 16% ofthe engagements made during the war years; carpenters constituted 18% of all contracts signed(1791–1820), but just 7% of hires made during the war.

51Galenson (1981a, p. 461). Grubb (1987, p. 104), on the other hand, argues that seasonal effectswere port or region specific, as indentured servant contracts sold in Philadelphia were, during the1770s, longer in the autumn months.



Were Contracts Tailored?

The richness of these data exposes the role of information in the design oflong-term apprenticeship contracts. Better informed matches were less likely toend prematurely, and, because they contained boys with higher expected produc-tivity, total time served wasmarkedly shorter. These observations likely constituteonly some of the effects of better information. For example, one also might expectcontracts that began with a successful trial period to be tailored better toindividuals’ true ability. In other words, duration in these contracts should havebeen less a function of observable attributes, such as age, and more a function ofunobservable attributes (such as skill or dedication). In order to test this hypoth-esis, separate OLS estimates of the determinants of duration, for the probation andno probation samples, are reported in Table 5. The coefficients on many of thehuman capital variables, such as age, are statistically significant in both samples.The table also reveals that both the guardian and mothers (father absent) variablesare significant and positive in the no probation sample, but not in the probationsample. This suggests that where probations were possible (not all guardians mayhave been amenable to probation periods), the uncertainty may have beendissipated, making a premium on contract length unnecessary. Masters also mayhave felt relatively uncertain about the quality of boys when fathers were absent.If the fathers were regularly absent, craftsmen may not have known these familieswell, or they may not have believed they were very capable of acting as effectivesponsors. Finally, while they are not strictly comparable, the model does producevery different residuals across the samples. The observable variables explain alower proportion of the variation in duration in the sample of contracts withprobations. When contract terms are included, the adjusted R2 for the probationsample is 0.52, versus 0.80 in the sample without probations. Thus in contractswith probations, duration may have been much more a function of unobservableattributes.52 These results provide some support for the claim that learningoccurred when the relationship began with a trial period, and that this learning(and filtering) affected the nature of these contracts.

IV. CONCLUSIONS

In turn of the nineteenth-century Montreal, apprenticeships were long-termcommitments characterized by explicit contracts. Contracts set down an appren-tice’s pay and the duration of the agreement. Most craft apprentices were

52 The difference in R2’s could arise simply because the variance in duration is higher in theprobation sample, or because the variance in the observables (conditioning on the coefficients) issmaller. Coefficients that are closer to zero in the probation sample are consistent with the hypothesisthat observables had a smaller effect on contract duration. In a pooled regression I can reject at the 5%level the null hypothesis that the coefficients in the probation contracts are the same as those in the noprobation contracts: theF (29,414) statistic is 1.712 (the critical value is about 1.64). There is no clearpattern, however, in the direction of the difference—some coefficients are closer to zero and othersfurther away. Second, the difference in R2’s is not due to a larger variance in duration in contracts withprobations, since it is actually considerably smaller in the probation sample.



TABLE 5Determinants of Contract Length, Contracts with and without Probations

Explanatoryvariables

Without probations With probations

Coefficient (std. error) Coefficient (std. error)

Probation length 0.008 (0.006)Contracts/Yr 20.002 (0.013) 20.010 (0.013)War of 1812 20.237 (0.244) 0.255 (0.361)Winter 0.076 (0.217) 20.604** (0.239)Summer 0.148 (0.198) 20.406 (0.246)Fall 20.128 (0.199) 20.411 (0.269)Age 21.834*** (0.241) 22.118** (0.963)Age squared 0.037*** (0.009) 0.049 (0.030)Sign 20.321 (0.215) 0.009 (0.237)English 0.285 (0.230) 0.272 (0.315)

Both parents 0.318 (0.288) 0.043 (0.342)Mother, Father absent 0.617 (0.378) 0.472 (0.809)Widow 20.148 (0.193) 0.210 (0.257)Guardian 0.636** (0.308) 20.139 (0.539)Neighborhood 20.015 (0.159) 20.141 (0.215)

Hatter 20.407 (0.352) 0.355 (0.553)Tailor 20.610* (0.361) 20.015 (0.397)Baker 20.756** (0.351) 0.098 (0.507)Butcher 20.818** (0.377)Mason 20.795 (0.709) 20.444 (0.423)Blacksmith 20.133 (0.276) 0.268 (0.336)Saddler 21.064*** (0.399) 20.115 (0.448)Shoemaker 20.929*** (0.264) 20.083 (0.314)Tanner 20.345 (0.407) 21.024** (0.426)Cooper 0.039 (0.354) 20.467 (0.308)Other2 or Other3 20.264 (0.311) 20.247 (0.561)Medium 20.377* (0.206) 0.115 (0.232)Large 20.336 (0.397) 0.929** (0.460)City 0.653*** (0.175) 0.430* (0.241)

Religion 0.266 (0.181) 0.527** (0.251)School 0.524** (0.218) 0.646* (0.343)No chores 20.523 (0.380) 0.124 (0.357)Humane 0.268 (0.256) 20.258 (0.379)Increasing pay 20.161 (0.296) 20.097 (0.325)Cash (constant) 20.252* (0.211) 0.110 (0.231)End pay 0.266 (0.195) 0.227 (0.245)Constant 24.620*** (1.710) 24.980*** (7.761)

LLF 2415.02 2174.46R-squared 0.828 0.652AdjustedR-squared 0.799 0.517N 286 148

Note.The dependent variable is the duration of the contract, measured in years. Estimation methodis OLS. Other2 applies to the no probation sample; Other3 to the probation sample. Notary and Decadeeffects are not reported (none of the coefficients are statistically significant). *, **, *** indicatesstatistically significant coefficients at the 0.1, 0.05, and 0.01 levels, respectively. For definitions, seeTable 1.


promised roughly the same subsistence compensation, while the duration of theircontracts varied widely. In this article I describe and explain how term lengthvaried across contracts. The competitiveness of the market ensured that mastersoffered apprenticeships that were just long enough for them to expect to recouptheir investment. In other words, the present discounted value of the stream of anapprentice’s per period expected value of productivity equaled the presentdiscounted value of the streams of pay plus any training costs the master faced.Because boys were inept when they began and expected to be more skilled whenthey left, they would seek an apprenticeship elsewhere if a master offered acontract duration they considered excessive. Rising productivity also implied thatmore able boys, and those in situations with lower pay or lower training costs,received shorter terms. For example, all else equal, older boys, those who trainedoutside of the city, apprentice butchers and masons, and those who did not receiveextra schooling, all signed contracts of shorter duration.The long-term nature of the agreements and the fact that apprentices’ pay was

not contingent on realized productivity meant that a precise estimate of a boy’sfuture stream of productivity was an important component of a well-constructedcontract. If masters were poorly acquainted with their apprentice when they drewup their contract they ran a higher risk of finding out later that the boy wasill-suited to their craft. In many cases, masters fell back on probationary periods toimprove the accuracy of their assessment of the boy’s future worth. When theywere better informed they weeded out inadequate boys, leaving them with boys ofhigher expected value. Such boys received shorter terms.This examination of apprenticeship terms may clarify future study on the

nature of North American apprenticeship and its eventual decline. The analysishere suggests, for example, that a traditional apprenticeship was not dependent onthe existence of a guild system. Furthermore, the fact that apprenticeshipsflourished in early-nineteenth-century Montreal indicates that, at least in Mon-treal, the decline may not have begun until closer to mid-century. Given thistiming, one causal factor may lie in the circumstances that moved craftsmen fromtheir work shops to factory floors, and gave rise to widespread division of labor.The analysis here suggests that changes in the quality of masters’ informationabout potential apprentices may have played a role in this transition. In themid-nineteenth century, Montreal witnessed a dramatic rise in population, thatstemmed largely from immigration. It may have become increasingly difficult formasters to form reasonably precise estimates of a boy’s future value. In addition,if a boy’s parents were newcomers, they may have been less willing or able tocreditably vouch for their sons’ fidelity and assume liability for their actions.Eventually, increasing uncertainty could have rendered long-term arrangementsuntenable. Once masters moved toward short-term arrangements, however, theirincentive to train, and apprentices’ incentive to learn, may have been compro-mised.



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The Market for Montreal Apprentices: Contract Length and Information