To study the distribution of economic activity across space and place-based policies, I develop a model of the location choice of new establishments incorporating monopsonistic labor markets, taxes, and spillovers. Estimates using German administrative data indicate that establishments prefer...

This chapter reviews the theory of monopsonistic wage setting, its empirical implications, and some puzzles the framework has struggled to explain. We begin by examining the fundamentals of monopson- istic wage determination. The core of the theory is a mapping from the distribution of worker...

In konzentrierten Arbeitsmärkten weisen Betriebe hohe Marktanteile bei der Rekrutierung von Arbeitskräften auf und können über eine marktbeherrschende Stellung verfügen. Internationale Studien zeigen, dass eine höhere Arbeitsmarktkonzentration zu niedrigeren Löhnen und schlechteren...

Monopsonistic labor markets create misallocation of labor while generating profits. These in turn incentivize firms to innovate, which drives aggregate growth. This paper explores the trade-off between static efficiency and growth by developing a tractable endogenous growth model with...

This chapter reviews the theory of monopsonistic wage setting, its empirical implications, and some puzzles the framework has struggled to explain. We begin by examining the fundamentals of monopson- istic wage determination. The core of the theory is a mapping from the distribution of worker...

This study investigates the relationship between the urban wage premium and employer concentration using Swedish full population employer-employee data. Departing from an AKM modeling framework to distinguish worker from firm specific heterogeneity - a measure of rent-sharing - we then measure...

Restraints clauses that prevent workers from joining (or starting) a competing firm (non-compete clauses), the disclosure of confidential information or the poaching of former co-workers or clients are traditionally justified to protect legitimate business interests (e.g. trade secrets,...

To study the distribution of economic activity across space and place-based policies, I develop a model of the location choice of new establishments incorporating monopsonistic labor markets, taxes, and spillovers. Estimates using German administrative data indicate that establishments prefer...

Using register data, we document that the average German labor market, defined by hires in combinations of 3-digit occupations, requirement levels, and commuting zones, is highly concentrated (HHI=0.257). By EU antitrust thresholds, 56 percent of these labor markets feature moderate or high...

How does the media bias the news? And in particular, how much does it cost owners to ensure that journalists comply with their stance? We compile a unique dataset of journalists and guests appearing on French television and radio shows between 2002 and 2020 to quantify the role played by...

This article bridges monopoly, monopsony, and countervailing power theories to analyze their welfare implications in a vertical supply chain. We develop a bilateral monopoly model with bargaining that accommodates upstream monopsony and downstream monopoly power. In equilibrium, the...

Using linked employer-employee data from Brazil, we document a large gender pay gap due to women working at lower-paying employers. To interpret this fact, we develop an equilibrium search model with endogenous firm pay, amenities, and hiring. We provide a constructive proof of identification of...

This study estimates and decomposes recruitment elasticity, a key measure of employer market power, across job-matching stages using data from Japan's largest job-matching intermediary. On average, recruitment elasticity is negative but not statistically significantly different from zero....

We examine employer monopsony power in the New Zealand private sector labour market. New Zealand has a small, geographically dispersed population, meaning that outside employment options for workers may be limited. However, New Zealand is generally considered to have a flexible labour market...

This paper reveals a new determinant of wage markdowns at the firm level, namely, the product scope. Using matched employer-employee data on Danish manufacturing firms, we document a negative elasticity between wages and firm scope, which is of a similar magnitude but opposite sign as the...

This paper reveals a new determinant of wage markdowns at the firm level, namely, the product scope. Using matched employer-employee data on Danish manufacturing firms, we document a negative elasticity between wages and firm scope, which is of a similar magnitude but opposite sign as the...

This paper examines the importance of labor market power and firm productivity for understanding the immigrant-native pay gap. Using matched employer-employee data from Canada, I estimate a wage-posting model that incorporates two-sided heterogeneity and strategic interactions in wage setting....

We study the effects of corporate acquisitions on workers using Swedish administrative data and document substantial, persistent earnings losses following acquisitions. These losses reflect both displacement and wage cuts among stayers from target firms. We find no evidence that increased...

Although wage rates are lower when employers have monopsony power, we find that the value of a statistical life (VSL) is not reduced when labor markets are more concentrated. Because the estimated VSL is the product of the wage and the wage-risk tradeoff rate, a greater tradeoff rate in highly...

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,...

Over the last thirty years, there have been significant changes in several empirical measures of local labor market monopsony power. A monopsonist has a profit incentive to offer lower wages to local workers. High skilled mobile workers can avoid these lower wages by moving to other more...

Previous research shows that female workers are less sensitive to wages in their decision to switch jobs than male workers, and that this could explain a substantial part of the gender wage gap. This paper studies to what extent gender differences in preferences and personality traits explain...

Labor economics often assumes that wages w are equal to the marginal revenue product of labor MRP L. However, recent literature has shown that firms' market power allows them to pay wages substantially below marginal productivity. The markdown (MRP L - w)/w is our preferred measure of firms'...

We model monopsony on the labor market using a separable matching model a la Choo and Siow (2006). We propose a simple method that estimates 1) the multidimensional determinants of productivity and non-wage preferences separately and 2) the variance of unobserved heterogeneity on both sides of...

Local labour market concentration may influence firms' employment responses to minimum wages. We evaluate this hypothesis using comprehensive 1998-2007 data on China's manufacturing sector and about 1,400 hand-collected county-level minimum wages. We find that, consistently with monopsony views,...

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,...

This paper sets up a two-country model of offshoring with monopolistically competitive product and monopsonistically competitive labour markets. In our model, an incentive for offshoring exists even between symmetric countries, because shifting part of the production abroad reduces local labour...

Minimum wages decrease employment in competitive markets, but can increase it in monopsonistic markets so long as they do not exceed the marginal product of labour. We find evidence of non-monotonicity both by market structure and minimum wage level. Minimum wage hikes initially increase hours...

This paper characterizes the power dynamics of firms in both product and labor markets in Lithuania between 2004 and 2018. We first show that both markets are not perfectly competitive, as both price markups and wage markdowns are far from unitary and homogeneous. Interestingly, we unveil that...