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Monopsony: Wages, Wage Bargaining and Job Requirements

Author

Listed:
  • Anderlik, Jasmin

    (Ministry of Labor and the Economy (Vienna))

  • Jumaniyozova, Malika

    (Johannes Kepler University Linz)

  • Schmidpeter, Bernhard

    (Vienna University of Economics and Business)

  • Winter-Ebmer, Rudolf

    (Johannes Kepler University Linz)

Abstract

Using linked vacancy-employer-employee data from Austria, we investigate how monopsony power affects firms' posting behavior and wage negotiations. Consistent with theoretical predictions, we find that firms with greater monopsony power post lower wages and offer fewer non-wage amenities, suggesting that wages and non-wage benefits are complementary. However, we find no evidence that monopsonistic firms demand higher levels of skill or education. Instead, our results indicate that they require more basic skills, particularly those related to routine tasks. On the workers' side, we find that employees hired in monopsonistic labor markets face significantly lower wages, both initially and in the long run. These lower wages are driven by both lower posted wages and reduced bargaining power, as well as reduced opportunities to climb the wage ladder later.

Suggested Citation

  • Anderlik, Jasmin & Jumaniyozova, Malika & Schmidpeter, Bernhard & Winter-Ebmer, Rudolf, 2024. "Monopsony: Wages, Wage Bargaining and Job Requirements," IZA Discussion Papers 17585, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp17585
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    More about this item

    Keywords

    monopsony; wages; bargaining; upskilling;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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