Shepherds were a critical component of the early wool industry in colonial Australia and persisted even after fencing was adopted and rapidly spread in the later nineteenth century. Initially shepherds were convicts, but after transportation ceased in the late 1840s, emancipists and free men were employed. Their duty was the same as in England: look after the flock during the day, and pen them nightly in folds made of hurdles. Analysis of wages and flock sizes indicates that pastoralists achieved good productivity gains with larger flocks but inflation of wages reduced the gains to modest levels. The gold rushes and labour shortages of the 1850s played a minor role in increasing both wages and flock sizes. Living conditions in huts were primitive, and the diet monotonous. Shepherds were exposed to a range of diseases, especially in Queensland. Flock-masters employed non-whites, usually at lower wages, and women and children. Fences only replaced shepherds when pastoralists realised that the new technology of fences, combined with other changes, would give them higher profits. The sheep were left to fend for themselves in the open paddocks, a system used to this day.