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Alan Manning - One of the best experts on this subject based on the ideXlab platform.
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Monopsony in Labor Markets: A Review:
ILR Review, 2020Co-Authors: Alan ManningAbstract:Researchers’ interest in Monopsony has increased in recent years. This article reviews the accumulating evidence that employers have considerable Monopsony power. It summarizes the application of t...
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the plant size place effect agglomeration and Monopsony in labour markets
Journal of Economic Geography, 2010Co-Authors: Alan ManningAbstract:This article shows, using data from both the USA and the UK, that average plant size is larger in denser markets. However, many popular theories of agglomeration-spillovers, cost advantages and improved match quality-predict that establishments should be smaller in cities. The article proposes a theory based on Monopsony in labour markets-firms in all labour markets have some market power but that they have less market power in cities-that can explain the stylized fact. It also presents evidence that the labour supply curve to individual firms is more elastic in larger markets, consistent with the Monopsony hypothesis.
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Monopsony and labour demand
Brussels economic review, 2005Co-Authors: Alan ManningAbstract:‘Monopsony and Labour Demand’ might strike many as a contradiction in terms as Monopsony is often thought to mean an outcome on the labour supply and not the labour demand curve. This paper argues that, despite initial appearances to the contrary, there is no inevitable contradiction between the view that employers have some Monopsony power over their workers and the enormous literature on the economics of labour demand. Indeed, popular models of ‘labour demand’ with convex costs of adjustment are really better thought of as models of monopsonistic firms. But the ‘labour demand’ literature could do with some re-focusing as the study of the wage and employment decisions of employers.
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The Real Thin Theory: Monopsony in Modern Labour Markets
LSE Research Online Documents on Economics, 2003Co-Authors: Alan ManningAbstract:Models of "modern Monopsony" based on job differentiation and/or search frictions seem to give employers non-negligible market power over their workers while avoiding the assumption of "classical Monopsony" that employers are large in relation to the size of the labour market that many labour economists find implausible. But, this paper argues that this is somewhat of an illusion because modern theories of Monopsony do assume that labour markets are "thin", although in a more subtle way than the classical models. The paper also argues that there is evidence that labour markets are "thin" in a way that gives employers some market power over their workers. It presents a model that combines both the job differentiation and search models of modern Monopsony and derives predictions about the relationship between wages and commuting. The paper uses UK data to argue that there is good evidence for these predictions: that there is a robust correlation between wages and commuting distance that is the result of worker job search in a thin labour market, that those with longer commutes are not, on average, fully compensated for them and that there is substantial "wasteful" commuting.
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Monopsony in motion imperfect competition in labor markets
2003Co-Authors: Alan ManningAbstract:What happens if an employer cuts wages by one cent? Much of labour economics is built on the assumption that all the workers will quit immediately. Here, Alan Manning mounts a systematic challenge to the standard model of perfect competition. "Monopsony in Motion" stands apart by analyzing labour markets from the real-world perspective that employers have significant market (or Monopsony) power over their workers. Arguing that this power derives from frictions in the labour market that make it time-consuming and costly for workers to change jobs, Manning re-examines much of labour economics based on this alternative and equally plausible assumption.This book addresses the theoretical implications of Monopsony and presents a wealth of empirical evidence. Our understanding of the distribution of wages, unemployment, and human capital can all be improved by recognizing that employers have some Monopsony power over their workers. Also considered are policy issues including the minimum wage, equal pay legislation, and caps on working hours. In a monopsonistic labour market, concludes Manning, the 'free' market can no longer be sustained as an ideal and labour economists need to be more open-minded in their evaluation of labour market policies. "Monopsony in Motion" will represent for some a new fundamental text in the advanced study of labour economics, and for others, an invaluable alternative perspective that henceforth must be taken into account in any serious consideration of the subject.
Edward J. Schumacher - One of the best experts on this subject based on the ideXlab platform.
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Classic or new Monopsony? Searching for evidence in nursing labor markets.
Journal of health economics, 2005Co-Authors: Barry T. Hirsch, Edward J. SchumacherAbstract:The market for registered nurses (RNs) is often offered as an example of “classic” Monopsony, while a “new” Monopsony literature emphasizes that firm labor supply is upward sloping independent of market structure. Using data from multiple sources, we explore the relationship between nursing wages in hospitals and measures of classic and new Monopsony. Wage level analysis fails to provide support for classic Monopsony, the relative wages of RNs in 240 U.S. labor markets being largely uncorrelated with hospital system concentration. Longitudinal analysis shows nursing wages declining with increases in hospital concentration. We interpret these results as providing support for classic Monopsony effects in the short run, but question whether wage effects are sustained in the long run. No relationship is found between nursing wages and a new Monopsony measure of mobility, but support for new Monopsony is found for women elsewhere in the labor market. RNs display greater interemployer mobility than do women (or men) in general. Two conclusions follow. First, upward sloping labor supply need not imply monopsonistic outcomes. Second, absent more compelling evidence, nursing should not be held up as a prototypical example of Monopsony—classic or new.
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Classic Monopsony or New Monopsony? Searching for Evidence in Nursing Labor Markets
2004Co-Authors: Barry T. Hirsch, Edward J. SchumacherAbstract:The market for hospital registered nurses (RNs) is often offered as an example of "classic" Monopsony, while a "new" Monopsony literature emphasizes firm labor supply being upward-sloping for reasons other than market structure. Using data from several sources, we explore the relationship between wages and measures of classic and new Monopsony. Micro wage data for 1993-2002 provide little evidence of classic monopsonistic outcomes in the long run, the relative wages of RNs in 240 U.S. labor markets being largely uncorrelated with market size or employer concentration. A short-run relationship is found, with RN wages declining in markets with increased hospital system concentration. Measures of new Monopsony use data on mobility to proxy inverse supply elasticities. No relationship is found between these measure and nursing wages, but evidence supporting new Monopsony is found for women elsewhere in the labor market. RNs display greater inter-employer mobility than do women (or men) in general. Two conclusions follow. First, evidence of upward sloping labor supply need not imply monopsonistic outcomes. Second, nursing should not be held up as a prototypical example of Monopsony.
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Monopsony power and relative wages in the labor market for nurses
Journal of health economics, 1995Co-Authors: Barry T. Hirsch, Edward J. SchumacherAbstract:This paper examines the thesis that Monopsony power is an important determinant of wages in nursing labor markets. Using data from the 1985-93 Current Population Surveys, measures of relative nurse/non-nurse wage rates for 252 labor markets are constructed. Contrary to predictions from the Monopsony model, no positive relationship exists between relative nursing wages and hospital density or market size. Nor is support found for the presence of Monopsony power based on evidence on union wage premiums, slopes of experience profiles, or the mix of RN to total hospital employment.
Michael R. Ransom - One of the best experts on this subject based on the ideXlab platform.
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Monopsony in the Labor Market
Journal of Economic Literature, 2016Co-Authors: William M. Boal, Michael R. RansomAbstract:This paper surveys recent theoretical and empirical research on Monopsony in labor markets, broadly defined as upward-sloping labor supply to an employer. We compare older Monopsony models based on small numbers of employers with newer models based on labor market frictions such as moving costs and search. We also compare older econometric approaches that focus on static wage-concentration relationships with newer approaches that focus on dynamics. Our review of empirical estimates suggests that Monopsony power based on small numbers of employers is probably rare but occasionally large, while Monopsony power based on frictions is probably widespread but small on average.
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Modern Models of Monopsony in Labor Markets: A Brief Survey
2010Co-Authors: Orley Ashenfelter, Henry S. Farber, Michael R. RansomAbstract:This brief survey contains a review of several new empirical papers that attempt to measure the extent of Monopsony in labor markets. As noted originally by Joan Robinson, monopsonistic exploitation represents the gap between the value of a worker's marginal product and the worker's wage, and it represents both a distortion in the allocation of resources and an income transfer away from workers. The evidence surveyed from a fairly broad range of labor markets suggests that Monopsony may be far more pervasive than is sometimes suggested.
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Modern models of Monopsony in labor markets: A brief survey
2010Co-Authors: Orley Ashenfelter, Henry S. Farber, Michael R. RansomAbstract:There has been a renewed interest in Monopsony in labor markets in recent years that includes both the traditional static approach to Monopsony, ably reviewed by Boal and Ransom (1997) and the new'' approach to Monopsony with more attention paid to dynamic issues, developed in detail by Manning (2003). The papers presented in this supplement highlight both approaches and illustrate the range of labor market settings in which the exercise of Monopsony power may be important.
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Labor Market Monopsony
Journal of Labor Economics, 2010Co-Authors: Orley Ashenfelter, Henry S. Farber, Michael R. RansomAbstract:There has been a renewed interest in Monopsony in labor markets in recent years that includes both the traditional static approach to Monopsony, ably reviewed by Boal and Ransom (1997), and the “new” approach to Monopsony with more attention paid to dynamic issues, developed in detail by Manning (2003). The articles presented in this supplement highlight both approaches and illustrate the range of labor market settings in which the exercise of Monopsony power may be important. The first use of the term “Monopsony” in economics is widely attributed to Robinson (1969). Robinson conceived of Monopsony as analogous to monopoly. Whereas monopoly refers to the case of a single seller confronted in a market by many buyers, Monopsony refers to the case of a single buyer confronted in a market by many sellers. Just as the monopolist faces a downward-sloping demand curve for his product and
Barry T. Hirsch - One of the best experts on this subject based on the ideXlab platform.
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Classic or new Monopsony? Searching for evidence in nursing labor markets.
Journal of health economics, 2005Co-Authors: Barry T. Hirsch, Edward J. SchumacherAbstract:The market for registered nurses (RNs) is often offered as an example of “classic” Monopsony, while a “new” Monopsony literature emphasizes that firm labor supply is upward sloping independent of market structure. Using data from multiple sources, we explore the relationship between nursing wages in hospitals and measures of classic and new Monopsony. Wage level analysis fails to provide support for classic Monopsony, the relative wages of RNs in 240 U.S. labor markets being largely uncorrelated with hospital system concentration. Longitudinal analysis shows nursing wages declining with increases in hospital concentration. We interpret these results as providing support for classic Monopsony effects in the short run, but question whether wage effects are sustained in the long run. No relationship is found between nursing wages and a new Monopsony measure of mobility, but support for new Monopsony is found for women elsewhere in the labor market. RNs display greater interemployer mobility than do women (or men) in general. Two conclusions follow. First, upward sloping labor supply need not imply monopsonistic outcomes. Second, absent more compelling evidence, nursing should not be held up as a prototypical example of Monopsony—classic or new.
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Classic Monopsony or New Monopsony? Searching for Evidence in Nursing Labor Markets ∗
2004Co-Authors: Barry T. HirschAbstract:The market for hospital registered nurses (RNs) is often offered as an example of “classic” Monopsony, while a “new” Monopsony literature emphasizes firm labor supply being upwardsloping for reasons other than market structure. Using data from several sources, we explore the relationship between wages and measures of classic and new Monopsony. Micro wage data for 1993-2002 provide little evidence of classic monopsonistic outcomes in the long run, the relative wages of RNs in 240 U.S. labor markets being largely uncorrelated with market size or employer concentration. A short-run relationship is found, with RN wages declining in markets with increased hospital system concentration. Measures of new Monopsony use data on mobility to proxy inverse supply elasticities. No relationship is found between these measure and nursing wages, but evidence supporting new Monopsony is found for women elsewhere in the labor market. RNs display greater inter-employer mobility than do women (or men) in general. Two conclusions follow. First, evidence of upward sloping labor supply need not imply monopsonistic outcomes. Second, nursing should not be held up as a prototypical example of Monopsony.
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Classic Monopsony or New Monopsony? Searching for Evidence in Nursing Labor Markets
2004Co-Authors: Barry T. Hirsch, Edward J. SchumacherAbstract:The market for hospital registered nurses (RNs) is often offered as an example of "classic" Monopsony, while a "new" Monopsony literature emphasizes firm labor supply being upward-sloping for reasons other than market structure. Using data from several sources, we explore the relationship between wages and measures of classic and new Monopsony. Micro wage data for 1993-2002 provide little evidence of classic monopsonistic outcomes in the long run, the relative wages of RNs in 240 U.S. labor markets being largely uncorrelated with market size or employer concentration. A short-run relationship is found, with RN wages declining in markets with increased hospital system concentration. Measures of new Monopsony use data on mobility to proxy inverse supply elasticities. No relationship is found between these measure and nursing wages, but evidence supporting new Monopsony is found for women elsewhere in the labor market. RNs display greater inter-employer mobility than do women (or men) in general. Two conclusions follow. First, evidence of upward sloping labor supply need not imply monopsonistic outcomes. Second, nursing should not be held up as a prototypical example of Monopsony.
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Monopsony power and relative wages in the labor market for nurses
Journal of health economics, 1995Co-Authors: Barry T. Hirsch, Edward J. SchumacherAbstract:This paper examines the thesis that Monopsony power is an important determinant of wages in nursing labor markets. Using data from the 1985-93 Current Population Surveys, measures of relative nurse/non-nurse wage rates for 252 labor markets are constructed. Contrary to predictions from the Monopsony model, no positive relationship exists between relative nursing wages and hospital density or market size. Nor is support found for the presence of Monopsony power based on evidence on union wage premiums, slopes of experience profiles, or the mix of RN to total hospital employment.
Suresh Naidu - One of the best experts on this subject based on the ideXlab platform.
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Monopsony in Online Labor Markets
American Economic Review: Insights, 2020Co-Authors: Arindrajit Dube, Suresh Naidu, Jeff Jacobs, Siddharth SuriAbstract:Despite the seemingly low switching and search costs of on-demand labor markets like Amazon Mechanical Turk, we find substantial Monopsony power, as measured by the elasticity of labor supply facing the requester (employer). We isolate plausibly exogenous variation in rewards using a double machine learning estimator applied to a large dataset of scraped MTurk tasks. We also reanalyze data from five MTurk experiments that randomized payments to obtain corresponding experimental estimates. Both approaches yield uniformly low labor supply elasticities, around 0.1, with little heterogeneity. Our results suggest Monopsony might also be present even in putatively "thick" labor markets.
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Labor Monopsony and the Limits of the Law
SSRN Electronic Journal, 2019Co-Authors: Suresh Naidu, Eric A. PosnerAbstract:Recent literature has suggested that antitrust regulation is an appropriate response to labor market Monopsony. This article qualifies the primacy of antitrust by arguing that a significant degree of labor market power is “frictional,” that is, without artificial barriers to entry or excessive concentration of employment. If Monopsony is pervasive under conditions of laissez-faire, antitrust is likely to play only a partial role in remedying it, and other legal and policy instruments to intervene in the labor market will be required.
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Monopsony power in migrant labor markets evidence from the united arab emirates
Journal of Political Economy, 2016Co-Authors: Suresh Naidu, Yaw Nyarko, Shingyi WangAbstract:By exploiting a reform in the United Arab Emirates that relaxed restrictions on employer transitions, we provide new estimates of the Monopsony power of firms over migrant workers. Our results show that the reform increased incumbent migrants’ earnings and firm retention. This occurs despite an increase in employer transitions and is driven by a fall in country exits. While the outcomes of incumbents improved, the reform decreased demand for new migrants and lowered their earnings. These results are consistent with a model of Monopsony in which firms face upward-sloping labor supply curves for both new recruits in source countries and incumbent migrants.
