Monopsony Power in Higher Education: A Tale of Two Tracks

Austan Goolsbee and Chad Syverson

Journal of Labor Economics, 2023, vol. 41, issue S1, S257 - S290

Abstract: This paper measures the degree of monopsony power in the US higher-education labor market by using school-specific labor demand instruments to directly estimate the residual labor supply curves facing individual universities. The results indicate that schools have significant monopsony power over tenure-track faculty but face perfectly elastic residual labor supply curves for non-tenure-track faculty. There is some evidence for three sources of monopsony power often discussed in the literature—employer concentration, search frictions/job-switching costs, and differentiated jobs. The results also suggest that monopsony over tenure-track faculty may have contributed to the trend toward hiring more non-tenure-track faculty.

Date: 2023
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Related works:
Chapter: Monopsony Power in Higher Education: A Tale of Two Tracks (2021)
Working Paper: Monopsony Power in Higher Education: A Tale of Two Tracks (2019)
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