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Do Local Amenities Increase Monopsony Power?

Author

Listed:
  • Christiana Ellen Hilmer

    (San Diego State University)

  • Michael John Hilmer

    (San Diego State University)

Abstract

We ask whether workers in high amenity locations are willing to cede greater degrees of monopsony power to their employers in exchange for the ability to remain in their more desirable locales. Our hypothesis is that negative returns to seniority should be greater for workers in higher amenity locations than for otherwise similar workers in lower amenity locations. Empirical evidence from a sample of public Ph.D. programs is consistent with this prediction. Using property values as well as number of pleasant days as a proxy for local amenities we find that the estimated negative returns to seniority are between 1.3 and 4.1 percent larger for higher property values locations and the negative returns to seniority are between 1.3 and 5.3 percent

Suggested Citation

  • Christiana Ellen Hilmer & Michael John Hilmer, 2019. "Do Local Amenities Increase Monopsony Power?," Economics Bulletin, AccessEcon, vol. 39(4), pages 2467-2475.
    • Handle: RePEc:ebl:ecbull:eb-19-00412
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    File URL: http://www.accessecon.com/Pubs/EB/2019/Volume39/EB-19-V39-I4-P229.pdf
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    More about this item

    Keywords

    Monopsony Power; Public-sector pay; Local Amenities;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • I2 - Health, Education, and Welfare - - Education

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