Oligopsony and the Distribution of Wages

V Bhaskar and Ted To

Labor and Demography from University Library of Munich, Germany

Abstract: A number of theories (search and efficiency wages) have been developed, in part, to explain why identically able workers are often paid different wages. However, when there is a minimum wage, they do not explain the resulting ``spike" in the wage distribution. Our model's predictions are consistent with this evidence. We assume that workers are equally able but have heterogeneous preferences for non-wage characteristics, while employers have heterogeneous productivity characteristics. This results in a model of labor market oligopsony where ``inside'' and ``outside'' forces interact, producing wage dispersion as well as a spike at the minimum wage.

Keywords: wage differentials; wage dispersion; monopsony; oligopsony; labor theory; minimum wage (search for similar items in EconPapers)
JEL-codes: J23 J42 L13 (search for similar items in EconPapers)
Date: 1999-03-18
Note: Type of Document - LaTex; prepared on IBM PC; to print on any;
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Oligopsony and the distribution of wages (2003)
Working Paper: Oligopsony and the Distribution of Wages (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpla:9903003

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