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

Author

Listed:
  • Orley Ashenfelter

    (Princeton University)

  • David Card

    (UC Berkeley)

  • Henry S. Farber

    (Princeton University)

  • Michael R. Ransom

    (Brigham Young University)

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 interfirm 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. Noncompete agreements, which are not enforceable in three states already, have also come under scrutiny.

Suggested Citation

  • Orley Ashenfelter & David Card & Henry S. Farber & Michael R. Ransom, 2021. "Monopsony in the Labor Market: New Empirical Results and New Public Policies," Working Papers 294, Princeton University, Department of Economics, Center for Economic Policy Studies..
    • Handle: RePEc:pri:cepsud:294
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    References listed on IDEAS

    as
    1. 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.
    2. 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).
    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. Alan Manning, 2021. "Monopsony in Labor Markets: A Review," ILR Review, Cornell University, ILR School, vol. 74(1), pages 3-26, January.
    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. 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.
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    Citations

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    Cited by:

    1. Bassier, Ihsaan, 2023. "Firms and inequality when unemployment is high," Journal of Development Economics, Elsevier, vol. 161(C).
    2. Mora, Claudio & Prem, Mounu & Rodriguez-Lesmes, Paul & Vargas, Juan F., 2024. "Health Workforce Reallocation in the Aftermath of Conflict: Evidence from Colombia," SocArXiv 2dwfu, Center for Open Science.
    3. Kahn, Matthew E. & Tracy, Joseph, 2024. "Monopsony in spatial equilibrium," Regional Science and Urban Economics, Elsevier, vol. 104(C).
    4. 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.
    5. 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.
    6. 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.
    7. Burdin, Gabriel & Garcia-Louzao, Jose, 2023. "Employee-Owned Firms and the Careers of Young Workers," IZA Discussion Papers 15880, Institute of Labor Economics (IZA).
    8. Gihleb, Rania & Giuntella, Osea & Tan, Jian Qi, 2023. "The Impact of Right-to-Work Laws on Long Hours and Work Schedules," IZA Discussion Papers 16588, Institute of Labor Economics (IZA).
    9. Nancy H. Chau & Ravi Kanbur & Vidhya Soundararajan, 2022. "Employer power and employment in developing countries," WIDER Working Paper Series wp-2022-100, World Institute for Development Economic Research (UNU-WIDER).
    10. Jose Garcia-Louzao & Alessandro Ruggieri, 2023. "Labor Market Competition and Inequality," CESifo Working Paper Series 10829, CESifo.
    11. 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.
    12. Korpi, Martin & Halvarsson, Daniel, 2023. "City Size, Employer Concentration, and Wage Income Inequality," Ratio Working Papers 363, The Ratio Institute.
    13. Meiselbach, Mark K. & Abraham, Jean M., 2023. "Do minimum wage laws affect employer-sponsored insurance provision?," Journal of Health Economics, Elsevier, vol. 92(C).
    14. Gibson, Matthew, 2021. "Employer Market Power in Silicon Valley," IZA Discussion Papers 14843, Institute of Labor Economics (IZA).
    15. Ihsaan Bassier, 2022. "Firms and inequality when unemployment is high," CEP Discussion Papers dp1872, Centre for Economic Performance, LSE.
    16. 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.

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    More about this item

    Keywords

    Monopsony; Labor Market Power;

    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
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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