Impact of property rights on labor contracts in commercial fisheries
Property rights are increasingly utilized for environmental and resource management: in fisheries these market-based approaches take the form of individual transferable quotas. This paper studies labor contracts in fisheries governed by individual transferable quotas (ITQs). Previous literature on labor contracts in fisheries models the dominance of a share system of remuneration between boat owner and crew in fisheries. We extend the standard model of the labor contract to the case of ITQ fisheries to explain the share contract between crew and boat owner and the share contract between boat owner and quota owner when boat owner, quota owner, and crew are risk averse in a stochastic environment. We test this model through analysis of the Mid-Atlantic surf clam fishery and present empirical evidence of changes in contracting practices, harvest rates and shares of crew remuneration.