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Monopsony and the efficiency of labour market interventions

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  • Manning, Alan

Abstract

Implicit in many discussions of labour market policy is the assumption that, in the absence of interventions, the operation of the labour market is well-approximated by the perfectly competitive model. The merits or demerits of particular policies is then seen as a trade-off between efficiency and equality. This paper analyses the impact of a variety of policies û the minimum wage, trade unions, unemployment insurance, progressive income taxation and restrictions on labour contracts û on efficiency when labour markets in the absence of intervention are monopsonistic and not perfectly competitive. A simple version of the Burdett and Mortensen (1998) model is used for this purpose.
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  • Manning, Alan, 2004. "Monopsony and the efficiency of labour market interventions," Labour Economics, Elsevier, vol. 11(2), pages 145-163, April.
    • Handle: RePEc:eee:labeco:v:11:y:2004:i:2:p:145-163
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    JEL classification:

    • J0 - Labor and Demographic Economics - - General

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