Monopsony in the market for religion

Luke Petach

Journal of Economic Behavior & Organization, 2024, vol. 221, issue C, 423-435

Abstract: This paper estimates the effect of religious labor market concentration on clergy wages. Using data on the state-level Herfindahl-Hirschman Index (HHI) from the Association of Religion Data Archives (ARDA), and data on individual clergy wages from the Census/American Community Survey (ACS), I estimate the effect of monopsony in the market for religion on clergy wages for the years 1980 to 2020. Ordinary least squares (OLS) estimates suggest the elasticity of individual clergy wages to the state-level HHI ranges between -0.05 and -0.17. These results are robust to the inclusion of controls for individual clergy characteristics, state-level religious tradition adherent shares, state-level labor market concentration, state- and year-fixed effects, and religious group-specific time trends. Application of the Oster (2019) test for selection on unobservables suggests that OLS understates the negative effect of concentration on clergy wages. The OLS results are supported by an instrumental variables (IV) specification exploiting a Bartik-style instrument interacting historic concentration with national concentration growth. The IV estimates suggest elasticities between -0.11 and -0.19.

Keywords: Economics of religion; Labor market monopsony; Market power; Industrial organization (search for similar items in EconPapers)
JEL-codes: J31 J42 Z12 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:221:y:2024:i:c:p:423-435

DOI: 10.1016/j.jebo.2024.03.030

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