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Monopsonistic wage discrimination and employment effect under conditions of constant labor supply elasticity

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  • Yeung-Nan Shieh

    ()
    (Department of Economics, San Jose State University)

Abstract

This note exploits an alternative but simple way to examine the employment effect of wage discrimination when the constant elasticity labor supply curves are strictly concave. The Bernoulli inequality applied in this paper allows us to show that wage discrimination increases total employment in a relative simple way, without resorting to complicated manipulations as were used by Formby, Layson and Smith (1983) and Shieh (2001).

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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 4 (2006)
Issue (Month): 32 ()
Pages: 1-4

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Handle: RePEc:ebl:ecbull:eb-06d40013

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Keywords: Bernoulli inequality;

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  1. Galera, Francisco & Zaratiegui, Jesus M., 2006. "Welfare and output in third-degree price discrimination: A note," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 605-611, May.
  2. Iñaki Aguirre, 2006. "Monopolistic price discrimination and output effect under conditions of constant elasticity demand," Economics Bulletin, AccessEcon, vol. 4(23), pages 1-6.
  3. Sandmo, Agnar, 1994. "Monopsonistic wage discrimination, incentives and efficiency," Labour Economics, Elsevier, vol. 1(2), pages 151-170, March.
  4. Formby, John P & Layson, Stephen K & Smith, W James, 1983. "Price Discrimination, 'Adjusted Concavity,' and Output Changes under Conditions of Constant Elasticity," Economic Journal, Royal Economic Society, vol. 93(372), pages 892-99, December.
  5. repec:ebl:ecbull:v:4:y:2006:i:23:p:1-6 is not listed on IDEAS
  6. William M. Boal & Michael R. Ransom, 1997. "Monopsony in the Labor Market," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 86-112, March.
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