Monopsony: Wages, Wage Bargaining and Job Requirements

Jasmin Anderlik (), Malika Jumaniyozova (), Bernhard Schmidpeter () and Rudolf Winter-Ebmer
Additional contact information
Jasmin Anderlik: Ministry of Labor and the Economy (Vienna)
Malika Jumaniyozova: Johannes Kepler University Linz
Bernhard Schmidpeter: Vienna University of Economics and Business

No 17585, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using linked vacancy-employer-employee data from Austria, we investigate how monopsony power affects firms' posting behavior and wage negotiations. Consistent with theoretical predictions, we find that firms with greater monopsony power post lower wages and offer fewer non-wage amenities, suggesting that wages and non-wage benefits are complementary. However, we find no evidence that monopsonistic firms demand higher levels of skill or education. Instead, our results indicate that they require more basic skills, particularly those related to routine tasks. On the workers' side, we find that employees hired in monopsonistic labor markets face significantly lower wages, both initially and in the long run. These lower wages are driven by both lower posted wages and reduced bargaining power, as well as reduced opportunities to climb the wage ladder later.

Keywords: monopsony; wages; bargaining; upskilling (search for similar items in EconPapers)
JEL-codes: J12 J13 J16 J22 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2024-12
New Economics Papers: this item is included in nep-com, nep-hrm, nep-lma and nep-reg
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Related works:
Working Paper: Monopsony: Wages, wagebargaining and job requirements (2025)
Working Paper: Monopsony: Wages, wage bargaining and job requirements (2024)
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