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Making their own weather? Estimating employer labour-market power and its wage effects

Pedro Martins

No 95, Working Papers from Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research

Abstract: The subdued wage growth observed over the last years in many countries has spurred renewed interest in monopsony views of the labour market. This paper is the first to measure the extent and robustness of employer labour-market power and its wage implications exploiting comprehensive matched employer-employee data. We find average (employment-weighted) Herfindhal indices of 800 to 1,100; and that less than 9% of workers are exposed to concentration levels thought to raise market power concerns. However, these figures can increase significantly with different methodological choices. Finally, when holding worker composition constant and instrumenting concentration, wages are found to be negatively affected by employer concentration, with elasticities of between -1.5% and -3%.

Keywords: Oligopsony; Wages; Portugal (search for similar items in EconPapers)
JEL-codes: J42 J31 J63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-lma and nep-ltv
Date: 2018-10
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Persistent link: https://EconPapers.repec.org/RePEc:cgs:wpaper:95

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