Indentured servitude refers to the historical practice of contracting to work for a fixed period of time, typically three to seven years, in exchange for transportation, food, clothing, lodging and other necessities during the term of indenture. Usually the father made the arrangements and signed the paperwork. They included men and women; most were under the age of 21, and most became helpers on farms or house servants. They were not paid cash. It was a system that provided jobs and—most important—transportation for poor young people from the overcrowded labor markets (such as Europe) who wanted to come to labor-short areas (at first, principally America, later, other colonies), but had no money to pay for it. The great majority became farmers and farm wives.

In colonial North America, farmers, planters, and shopkeepers found it very difficult to hire free workers, primarily because cash was short and it was so easy for those workers to set up their own farms. Consequently, the more common solution was to pay the passage of a young worker from England or Germany, who would work for several years to pay off the travel costs debt. During that indenture period the servants were not paid wages, but they were provided food, room, clothing, and training. Most white immigrants arrived in Colonial America as indentured servants, usually as young men and women from Britain or Germany, under the age of 21.^{[citation needed]} Typically, the father of a teenager would sign the legal papers, and work out an arrangement with a ship captain, who would not charge the father any money. The captain would transport the indentured servants to the American colonies, and sell their legal papers to someone who needed workers. At the end of the indenture, the young person was given a new suit of clothes and was free to leave. Many immediately set out to begin their own farms, while others used their newly acquired skills to pursue a trade.