Monopsony power, pay structure and training

Samuel Muehlemann, Paul Ryan and Stefan Wolter
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Paul Ryan: KingÕs College Cambridge

No 99, Economics of Education Working Paper Series from University of Zurich, Department of Business Administration (IBW)

Abstract: Although interest in monopsonistic influences on labour market outcomes has revived in recent years, only a few empirical studies provide direct evidence on it. This paper analyses empirically the effect of monopsony power on pay structure, using a direct measure of labour market 'thinness'. We find that having fewer competitors for skilled labour is associated at the level of the establishment with lower pay for both skilled labour and trainees, but not for unskilled labour. These findings have potentially important implications for the economic theory of training, as most recent models assume that skilled pay is set monopolistically but both unskilled and trainee pay are determined competitively. Our results support those assumptions for skilled pay and unskilled pay, but not for trainee pay.

Keywords: Monopsony; wage differentials; firm-sponsored training. (search for similar items in EconPapers)
JEL-codes: J24 J31 J42 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2011-03
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Citations: View citations in EconPapers (1)

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http://repec.business.uzh.ch/RePEc/iso/leadinghouse/0099_lhwpaper.pdf (application/pdf)

Related works:
Journal Article: Monopsony Power, Pay Structure, and Training (2013)
Working Paper: Monopsony Power, Pay Structure and Training (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:iso:educat:0099

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