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After the conquest, as craftworkers and laborers, the yanakuna played a significant role in a variety of both rural and urban production sectors in Peru's colonial economy.

First Decades of Colonization
The Spanish initially exacted tribute from the indigenous peoples of Peru through the ayllu-based encomienda system, by which native subjects were forced to contribute labor and goods (increasingly in the form of silver money) in service of the Spanish crown. Yanakuna, however, were separate from this system of obligation, and often performed different tasks. While the indios de encomienda fulfilled the most menial jobs in the Potosi silver mines, for example, yanakuna served as skilled artisans. Some yanakuna did work in the mines themselves from their beginnings in the 1540s, but unlike the indios de encomienda, they worked as free wage laborers.

Yanakuna in Mining and the Mita
Under the reforms imposed by Viceroy Francisco de Toledo (1569-1581), a system of draft labor known as the mita came to replace the encomienda system, by which villages within a several-hundred mile radius around Potosi had to send around one seventh of their male tribute-age population (from ages 18 to 50) each year to work in the mines. This change in labor organization occurred for a number of reasons: the Crown's explicitly stated preference for Peru to emphasize silver export and advances in mining technology increase the demand for labor; at the same time, the imposition of the mita allowed the Crown to push against the power of the encomenderos (Spanish recipients of encomienda grants), and offer native labor to non-encomenderos in Peru.

With this shift, yanakuna retained their place within the colonial economy of labor, and even grew in importance. As indios de encomienda decreased in number at Potosi, yanakuna increased. And, though mitayos (mita labor draftees) filled an important role in completing tasks undesirable to free laborers, they did not constitute a majority of laborers at Potosi— in 1603, for example, only 5,100 Indians out of 58,800 working at Potosi were mitayos. The proportion of mitayos continued to decrease through the seventeenth century, as the proportion of yanakuna increased: in the latter half of the sixteenth century, yanakuna constituted less than 10% of tribute paying subjects, while they constituted about 40% of this population in the latter half of the seventeenth century.

A 1601 order from the Crown stated a preference for voluntary labor; indeed, though the yanakuna may have been bound as servants, historian Raquel Gil Montero suggests that after the Toledo reforms, the tribute-paying yanakuna at Potosi could be considered "free laborers." It was to the natives' advantage to work for market-rate wages as a free laborer (as opposed to the below market-rate wages of the mitayos), considering the expectation of tribute in money form.

Yanakuna in Other Economic Sectors and Labor Arrangements
As Spanish settlers brought European agriculture to Peru, yanakuna labor supplemented that of mita draftees on farms. In this context, "yanakuna" referred to laborers who permanently resided at their place of employment. As an alternative to mita draftees, Spaniards preferred yanakuna were to African slaves, as the former were familiar with both indigenous and European methods, and did not need to be purchased. As in the mines, yanakuna labor in some areas represented a significant proportion of the labor force. The historian Steve J. Stern has written that Spanish colonials in the Huamanga region of Peru increasingly depended on contracted yanakuna labor as the mita labor draft became less reliable, especially for less politically influential settlers (in part due to resistance and evasion from within ayllus, as well as indigenous population decline). This was the case not only in farming and mining, but also in ranching and manufactures.

In these contract relationships, a yanakuna promised labor services to a master in exchange for subsistence, as well as land and credit. Labor arrangements mimicking this yanakuna form— separate from the natives' ayllus— proliferated through the early seventeenth century, as Spanish employers sought to secure a labor force. In some cases, factory owners brought laborers from their ayllus to reside in situ like yanakuna; in others, contracts with free wage laborers came to resemble yanakuna contracts in their duration and reciprocal guarantees. What Stern calls "yanacona-like" relationships developed as a way for Indian workers to repay debts to a Spanish employer. And, due to labor demand, Spaniard's sometimes sought to convince Indians to voluntarily enter yanakuna contracts on farms with attractive wage offers. The need for coercion to secure labor indeed decreased, as the monetization of tribute, the associated integration of a commercial economy, and the burdens of the mita made ayllus less self-sufficient, and induced Indian members to seek subsistence beyond.

Though separate from their ayllus, yanakuna were not completely dislocated from community. Many still owned land, and some of those working on farms lived their with families. In general, like other colonial-era migrants, yanakuna moved with their families and spouses.

In urban areas, yanakuna owned and passed down real estate. Unlike many other urban Indian laborers bound in servitude, often in domestic work, urban yanakuna maintained a more privileged status working as skilled craftspeople. Here, they were also distinguished by their comparably greater degree of acculturation to Spanish custom and language. Some scholars argue that this integration into urban colonial society by yanakuna actually represented an extension into a new context of older Andean practices of migration meant to fulfill different ecological niches.