Policy Brief: Employer Market Power in Silicon Valley

Matthew Gibson

No 182, IZA Policy Papers from Institute of Labor Economics (IZA)

Abstract: Adam Smith alleged that secret employer collusion to reduce labor earnings is common. This paper examines an important case of such behavior: no-poach agreements through which technology companies agreed not to compete for each other's workers. Exploiting the plausibly random timing of a US Department of Justice investigation, I estimate that these agreements cost affected workers approximately 5 percent of annual salary. Stock bonuses and ratings of job satisfaction were also negatively affected.

Keywords: monopsony; oligopsony; employer market power; labor earnings (search for similar items in EconPapers)
JEL-codes: J30 J42 K21 L41 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2021-11
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Citations: View citations in EconPapers (5)

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