Monopsony Power, Pay Structure, and Training

Samuel Muehlemann, Paul Ryan and Stefan Wolter

ILR Review, 2013, vol. 66, issue 5, 1097-1114

Abstract: Although interest in monopsonistic influences on labor market outcomes has revived in recent years, only a few empirical studies provide direct evidence on this topic. In this article, the authors analyze the effect of monopsony power on pay structure, using a direct measure of labor market thinness. The authors find evidence of monopsony power, as firms facing fewer local competitors offer lower wages to skilled labor and trainees, but not to unskilled labor. The findings have important implications for the economic theory of training, as most recent models assume monopsonistic pay-setting for skilled labor, but not for trainees.

Date: 2013
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Citations: View citations in EconPapers (24)

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Working Paper: Monopsony power, pay structure and training (2011)
Working Paper: Monopsony Power, Pay Structure and Training (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:66:y:2013:i:5:p:1097-1114

DOI: 10.1177/001979391306600504

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