Wal-Mart’s Monopsony Power in Local Labor Markets

Alessandro Bonanno and Rigoberto Lopez

No 149210, Research Reports from University of Connecticut, Food Marketing Policy Center

Abstract: Despite considerable debate as to Wal-Mart’s impact on retail workers, to date there has been little structural analysis on the topic. This paper measures and tests for Wal-Mart’s monopsony power in local labor markets using a dominant-firm model and data on contiguous U.S. counties where the company operates. Empirical results show that Wal-Mart’s monopsony power over workers varies significantly across the country, being higher in rural counties, particularly in the south. For instance, Wal-Mart’s buying power index in labor markets in rural southern central states is estimated to be 6% or higher while the impact on northeastern states’ wages is negligible. The results suggest that this is not a nationwide problem.

Keywords: Industrial; Organization (search for similar items in EconPapers)
Pages: 33
Date: 2008-02
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https://ageconsearch.umn.edu/record/149210/files/rr103.pdf (application/pdf)

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Working Paper: Wal-Mart’s Monopsony Power in Local Labor Markets (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uconnr:149210

DOI: 10.22004/ag.econ.149210

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