Dynamic Monopsony: Evidence from a French Establishment Panel

Fathi Fakhfakh and Felix FitzRoy

No 1622, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper uses a panel of about 6000 French establishments to test some implications of the modern theory of dynamic monopsony or upward sloping labour supply curves for average firm wages. Panel estimates provide strong evidence of a much larger long run employer size - wage effect (ESWE) than found previously, while controlling for worker quality and compensating differentials with lagged wages, and for profitability (rent sharing). Employment expansion also has a positive effect on wages, providing further evidence for upward sloping labour supply (as distinct from the effect of shocks in a perfectly competitive labour market).

Keywords: dynamic monopsony; firm-size wage effect; labour supply (search for similar items in EconPapers)
JEL-codes: C23 J30 J31 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2005-06
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Citations: View citations in EconPapers (1)

Published - published in: Economica, 2006, 73 (291), 533-545

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Journal Article: Dynamic Monopsony: Evidence from a French Establishment Panel (2006)
Working Paper: Dynamic Monopsony: Evidence from a French Establishement Panel (2003)
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