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Monopsony in the Labor Market: New Empirical Results and New Public Policies

Author

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  • Orley C. Ashenfelter
  • David Card
  • Henry S. Farber
  • Michael Ransom

Abstract

This paper summarizes the results of nearly a dozen new papers presented at the Sundance Conference on Monopsony in Labor Markets held in October 2018. These papers, to be published as a special issue of the Journal of Human Resources, study various aspects of monopsony and failures of competition in labor markets. It also reports on the new developments in public policies associated with widespread concerns about labor market competition and efforts to ameliorate competitive failures. The conference papers range from studies of the labor supply elasticity individual firms face to studies of local labor market concentration to studies of explicit covenants suppressing labor market competition. New policies range from private and public antitrust litigation to concerns about the effect of mergers and inter-firm agreements on labor market competition. We provide a detailed discussion of the mechanics of the Silicon Valley High Tech Worker conspiracy to suppress competition based on Court documents in the case. Non-compete agreements, which are not enforceable in three states already, have also come under scrutiny.

Suggested Citation

  • Orley C. Ashenfelter & David Card & Henry S. Farber & Michael Ransom, 2021. "Monopsony in the Labor Market: New Empirical Results and New Public Policies," NBER Working Papers 29522, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29522
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    References listed on IDEAS

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    1. Azar, José & Marinescu, Ioana & Steinbaum, Marshall & Taska, Bledi, 2020. "Concentration in US labor markets: Evidence from online vacancy data," Labour Economics, Elsevier, vol. 66(C).
    2. Alan Manning & Barbara Petrongolo, 2017. "How Local Are Labor Markets? Evidence from a Spatial Job Search Model," American Economic Review, American Economic Association, vol. 107(10), pages 2877-2907, October.
    3. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    4. Peter Kuhn, 2004. "Is monopsony the right way to model labor markets? a review of Alan Manning's monopsony in motion," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 11(3), pages 369-378.
    5. Evan Starr, 2019. "Consider This: Training, Wages, and the Enforceability of Covenants Not to Compete," ILR Review, Cornell University, ILR School, vol. 72(4), pages 783-817, August.
    6. Alan Manning, 2021. "Monopsony in Labor Markets: A Review," ILR Review, Cornell University, ILR School, vol. 74(1), pages 3-26, January.
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    Cited by:

    1. Rania Gihleb & Osea Giuntella & Jian Qi Tan, 2024. "The impact of right‐to‐work laws on long hours and work schedules," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 43(3), pages 696-713, June.
    2. Kahn, Matthew E. & Tracy, Joseph, 2024. "Monopsony in spatial equilibrium," Regional Science and Urban Economics, Elsevier, vol. 104(C).
    3. Bassier, Ihsaan, 2022. "Firms and inequality when unemployment is high," LSE Research Online Documents on Economics 117999, London School of Economics and Political Science, LSE Library.
    4. Alex Bryson & Paul Willman, 2024. "How should we think about employers’ associations?," British Journal of Industrial Relations, London School of Economics, vol. 62(2), pages 193-205, June.
    5. Gibson, Matthew, 2021. "Employer Market Power in Silicon Valley," IZA Discussion Papers 14843, Institute of Labor Economics (IZA).
    6. Jose Garcia-Louzao & Gabriel Burdin, 2023. "Employee Owned Firms and the Careers of Young Workers," Bank of Lithuania Working Paper Series 113, Bank of Lithuania.
    7. Jose Garcia-Louzao & Alessandro Ruggieri, 2023. "Labor Market Competition and Inequality," CESifo Working Paper Series 10829, CESifo.
    8. Korpi, Martin & Halvarsson, Daniel, 2023. "City Size, Employer Concentration, and Wage Income Inequality," Ratio Working Papers 363, The Ratio Institute.
    9. Meiselbach, Mark K. & Abraham, Jean M., 2023. "Do minimum wage laws affect employer-sponsored insurance provision?," Journal of Health Economics, Elsevier, vol. 92(C).
    10. Ihsaan Bassier, 2022. "Firms and inequality when unemployment is high," CEP Discussion Papers dp1872, Centre for Economic Performance, LSE.
    11. Chau, Nancy H. & Kanbur, Ravi & Soundararajan, Vidhya, 2022. "Employer Power and Employment in Developing Countries," IZA Discussion Papers 15514, Institute of Labor Economics (IZA).
    12. Bassier, Ihsaan, 2023. "Firms and inequality when unemployment is high," Journal of Development Economics, Elsevier, vol. 161(C).
    13. Andrew Leigh, 2023. "How uncompetitive markets hurt workers," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 26(1), pages 1-21.
    14. Mora-Garcia, Claudio A & Prem, Mounu & Rodriguez-Lesmes, Paul & Vargas, Juan F., 2024. "Health Workforce Reallocation in the Aftermath of Conflict: Evidence from Colombia," Documentos de Trabajo 21124, Universidad del Rosario.
    15. Brianna L. Alderman & Roger D. Blair & Perihan Ö. Saygin, 2023. "Monopsony, wage discrimination, and public policy," Economic Inquiry, Western Economic Association International, vol. 61(3), pages 572-583, July.
    16. Bassier, Ihsaan, 2022. "Firms and inequality when unemployment is high," LSE Research Online Documents on Economics 121970, London School of Economics and Political Science, LSE Library.

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    More about this item

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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