INSEAD Library

Includes bibliographical references and index

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Monopsony in Motion Imperfect Competition in Labor Market Contents Preface PART ONE: BASICS 1 Introduction 1.1 The Advantages of a Monopsonistic Perspective 1.2 Objections to Monopsony and Oligopsony 1.3 Monopsony or Matching or Both? 1.4 Antecedents 1.5 Summary of Chapters and Main Results 2 Simple Models of Monopsony and Oligopsony 2.1 Static Partial Equilibrium Models of Monopsony 2.2 A Simple Model of Dynamic Monopsony 2.3 A Generalized Model of Monopsony 2.4 A General Equilibrium Model of Oligopsony 2.5 Perfect Competition and Monopsony 2.6 A Simple Measure of Monopsony Power 2.7 Positive and Normative Aspects of Monopsony and Oligopsony 2.8 Implications and Conclusions Appendix 2 3 Efficiency in Oligopsonistic Labor Markets 3.1 Free Entry of Firms 3.2 Endogenous Recruitment Activity 3.3 Elasticity in Labor Supply: Free Entry of Workers 3.4 Elasticity in Labor Supply: Heterogeneity in Reservation Wages 3.5 Heterogeneity in Reservation Wages and Free Entry of Firms 3.6 Multiple Equilibria in Models of Oligopsony: An Application to Ghettoes 3.7 Conclusions Appendix 3 4 The Elasticity of the Labor Supply Curve to an Individual Firm 4.1 The Employer Size--Wage Effect xi 1 3 11 13 14 16 19 29 30 32 34 36 42 44 49 50 52 56 59 61 63 64 65 66 69 70 80 81 viii CONTENTS 4.2 Competing Explanations for the Employer Size­Wage Effect 4.3 Reverse Regressions 4.4 Estimating Models of Dynamic Monopsony 4.5 Estimating the Wage Elasticity of Separations 4.6 The Proportion of Recruits from Employment 4.7 The Elasticity of the Labor Supply Curve Facing the Firm 44.8 The Estimation of Structural Equilibrium Search Models of the Labor Market 4.9 Conclusions Appendix 4A Appendix 4B PART TWO: THE STRUCTURE OF WAGES 5 The Wage Policies of Employers 5.1 The Discriminating Monopsonist 5.2 Non-Manipulable Wage Discrimination 5.3 Empirical Evidence 5.4 Conclusions Appendix 5 6 Earnings and the Life Cycle 6.1 The Earnings Losses of Displaced Workers 6.2 Sample Selection in the Cross-Sectional Earnings Profile 6.3 The Cross-Sectional Returns to Experience and Tenure in a Job-Shopping Model 6.4 Empirical Approaches to the Estimation of the LifeCycle Profile in Earnings 6.5 Estimating the Return to Job Mobility 6.6 The Life-Cycle Profile of Earnings for Older Men 6.7 Conclusions Appendix 6A Appendix 6B 7 Gender Discrimination in Labor Markets 7.1 The Gender Pay Gap 7.2 Monopsony and the Gender Pay Gap 7.3 The Elasticity in Labor Supply to the Firm and the Market 7.4 Money and Motivation 7.5 Gender Differences in the Returns to Job Mobility 7.6 Gender Differences in the Wage Elasticity of Separations 84 91 96 100 104 104 106 107 108 111 115 117 118 121 129 136 137 141 144 147 152 163 166 176 179 180 189 193 194 195 198 199 205 206 CONTENTS ix 208 210 215 216 217 218 220 223 225 227 234 235 237 239 241 245 250 254 256 258 264 264 269 271 280 284 286 292 296 297 297 301 302 305 312 313 318 319 7.7 Human Capital Explanations of the Gender Pay Gap 7.8 The Effect of UK Equal Pay Legislation 7.9 Prejudice and Monopsony 7.10 Conclusions 8 Employers and Wages 8.1 Explaining the Correlations between Employer Characteristics and Wages 8.2 Monopsony and Compensating Wage Differentials 8.3 Choice of Working Conditions 8.4 Mandated Benefits 8.5 Hours of Work 8.6 Conclusion Appendix 8 PART THREE: LABOR DEMAND AND SUPPLY 9 Unemployment, Inactivity, and Labor Supply 9.1 Endogenizing Job Search Activity 9.2 Unemployment and Inactivity 9.3 The Job Search of the Employed 9.4 Quits 9.5 Involuntary Unemployment 9.6 Efficiency Wages and Monopsony 9.7 Conclusions Appendix 9 10 Vacancies and the Demand for Labor 10.1 The Interpretation of Vacancy Statistics 10.2 Filling Vacancies 10.3 The Technology of Matching: Random versus Balanced Matching 10.4 Empirical Evidence on Random and Balanced Matching 10.5 Estimating the Labor Cost Function 10.6 Lay-Offs 10.7 Conclusions Appendix 10 11 Human Capital and Training 11.1 Acquiring Education 11.2 Employer-Provided General Training 11.3 On-the-Job Specific Training 11.4 Empirical Analyses of Training 11.5 Conclusion Appendix 11 x CONTENTS PART FOUR: WAGE-SETTING INSTITUTIONS AND CONCLUSIONS 12 The Minimum Wage and Trade Unions 12.1 The Minimum Wage and the Distribution of Wages: Spikes and Spillovers 12.2 The Minimum Wage and Changes in US Wage Inequality 12.3 The Minimum Wage and Employment 12.4 Models of Trade Unions 12.5 Trade Unions and Wages 12.6 Conclusions Appendix 12A Appendix 12B 13 Monopsony and the Big Picture 13.1 The Sources of Monopsony Power 13.2 A Sense of Perspective 13.3 Monopsony and Labor Market Policy 13.4 Future Directions 13.5 Conclusions Data Sets Appendix United States United Kingdom Bibliography Index 323 325 325 333 338 347 350 354 355 358 360 360 361 364 366 367 368 368 374 379 397