Monopsony and the Efficiency of Labour Market Interventions

Alan Manning

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Implicit in many discussions of labour market policy is the assumption that, in the absence of interventions, the operation of the labour market is well-approximated by the perfectly competitive model. The merits or demerits of particular policies is then seen as a trade-off between efficiency and equality. This paper analyses the impact of a variety of policies û the minimum wage, trade unions, unemployment insurance, progressive income taxation and restrictions on labour contracts û on efficiency when labour markets in the absence of intervention are monopsonistic and not perfectly competitive. A simple version of the Burdett and Mortensen (1998) model is used for this purpose.

Keywords: Labour market policy; Monopsony (search for similar items in EconPapers)
JEL-codes: J0 (search for similar items in EconPapers)
Date: 2001-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Monopsony and the efficiency of labour market interventions (2004)
Working Paper: Monopsony and the efficiency of labour market interventions (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0514

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