Estimating the Firm's Labor Supply Curve in a "New Monopsony" Framework: Schoolteachers in Missouri
AbstractIn the context of certain dynamic models, it is possible to infer the elasticity of labor supply to the firm from the elasticity of the quit rate with respect to the wage. Using this property, we estimate the average labor supply elasticity to public school districts in Missouri. We leverage the plausibly exogenous variation in prenegotiated district salary schedules to instrument for actual salary. These estimates imply a labor supply elasticity of about 3.7, suggesting that school districts possess significant market power. The presence of monopsony power in this teacher labor market may be partially explained by its institutional features. (c) 2010 by The University of Chicago. All rights reserved..
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Labor Economics.
Volume (Year): 28 (2010)
Issue (Month): 2 (04)
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Other versions of this item:
- Ransom, Michael R. & Sims, David P., 2009. "Estimating the Firm's Labor Supply Curve in a "New Monopsony" Framework: School Teachers in Missouri," IZA Discussion Papers 4271, Institute for the Study of Labor (IZA).
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
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