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Oligopsony and the distribution of wages

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  • Bhaskar, V.
  • To, Ted

Abstract

We present a simple model which is consistent with the evidence on wage dispersion, including persistent inter- and intra-industry wage differentials, and the effects of minimum wages on this distribution. Our model assumes 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 in wage determination, with results which are consistent with the empirical evidence.
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  • Bhaskar, V. & To, Ted, 2003. "Oligopsony and the distribution of wages," European Economic Review, Elsevier, vol. 47(2), pages 371-399, April.
    • Handle: RePEc:eee:eecrev:v:47:y:2003:i:2:p:371-399
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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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