Monopsony: Wages, wage bargaining and job requirements

Rudolf Winter-Ebmer, Jasmin Anderlik, Malika Jumaniyozova and Bernhard Schmidpeter

No 2024-15, Economics working papers from Department of Economics, Johannes Kepler University Linz, Austria

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.

Date: 2024
New Economics Papers: this item is included in nep-com, nep-hrm and nep-lma
Note: English
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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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