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Marshall Lecture 2020: the measure of monopsony

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  • Langella, Monica
  • Manning, Alan

Abstract

There has been increasing interest in recent years in monopsony in the labour market. This paper discusses how we can measure monopsony power by combining insights from models based on both frictions and idiosyncrasies. It presents some evidence from the United Kingdom and the United States about how monopsony power varies across the wage distribution within markets, over the business cycle and over time.

Suggested Citation

  • Langella, Monica & Manning, Alan, 2021. "Marshall Lecture 2020: the measure of monopsony," LSE Research Online Documents on Economics 111444, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:111444
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    File URL: http://eprints.lse.ac.uk/111444/
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    References listed on IDEAS

    as
    1. Steven Berry & Martin Gaynor & Fiona Scott Morton, 2019. "Do Increasing Markups Matter? Lessons from Empirical Industrial Organization," Journal of Economic Perspectives, American Economic Association, vol. 33(3), pages 44-68, Summer.
    2. Azar, José & Marinescu, Ioana & Steinbaum, Marshall & Taska, Bledi, 2020. "Concentration in US labor markets: Evidence from online vacancy data," Labour Economics, Elsevier, vol. 66(C).
    3. Alan Manning & Barbara Petrongolo, 2017. "How Local Are Labor Markets? Evidence from a Spatial Job Search Model," American Economic Review, American Economic Association, vol. 107(10), pages 2877-2907, October.
    4. Raven Molloy & Christopher L. Smith & Riccardo Trezzi & Abigail Wozniak, 2016. "Understanding Declining Fluidity in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(1 (Spring), pages 183-259.
    5. Sabrina T. Howell & J. David Brown, 2020. "Do Cash Windfalls Affect Wages? Evidence from R&D Grants to Small Firms," Working Papers 20-06, Center for Economic Studies, U.S. Census Bureau.
    6. Kory Kroft & Yao Luo & Magne Mogstad & Bradley Setzler, 2020. "Imperfect Competition and Rents in Labor and Product Markets: The Case of the Construction Industry," NBER Working Papers 27325, National Bureau of Economic Research, Inc.
    7. Manning, Alan, 1987. "An Integration of Trade Union Models in a Sequential Bargaining Framework," Economic Journal, Royal Economic Society, vol. 97(385), pages 121-139, March.
    8. Susanto Basu, 2019. "Are Price-Cost Markups Rising in the United States? A Discussion of the Evidence," Journal of Economic Perspectives, American Economic Association, vol. 33(3), pages 3-22, Summer.
    9. Carl Shapiro, 2019. "Protecting Competition in the American Economy: Merger Control, Tech Titans, Labor Markets," Journal of Economic Perspectives, American Economic Association, vol. 33(3), pages 69-93, Summer.
    10. Alan Manning, 2021. "Monopsony in Labor Markets: A Review," ILR Review, Cornell University, ILR School, vol. 74(1), pages 3-26, January.
    11. Ihsaan Bassier & Arindrajit Dube & Suresh Naidu, 2020. "Monopsony in Movers: The Elasticity of Labor Supply to Firm Wage Policies," NBER Working Papers 27755, National Bureau of Economic Research, Inc.
    12. Sabrina T. Howell & J. David Brown, 2020. "Do Cash Windfalls Affect Wages? Evidence from R&D Grants to Small Firms," Working Papers 20-6, Center for Economic Studies, U.S. Census Bureau.
    13. Alan Manning, 2012. "Steady-State Equilibrium in a Model of Short-Term Wage-Posting," CEP Discussion Papers dp1158, Centre for Economic Performance, LSE.
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    Citations

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    Cited by:

    1. Bassier, Ihsaan, 2022. "Firms and inequality when unemployment is high," LSE Research Online Documents on Economics 117999, London School of Economics and Political Science, LSE Library.
    2. Harkness, Susan & Popova, Daria & Avram, Silvia, 2023. "Gender differences in job mobility and pay progression in the UK," ISER Working Paper Series 2023-02, Institute for Social and Economic Research.
    3. Filippo Passerini, 2022. "Monopsony in labor markets: Empirical evidence from Italian firms," French Stata Users' Group Meetings 2022 24, Stata Users Group.
    4. Gibson, Matthew, 2021. "Employer Market Power in Silicon Valley," IZA Discussion Papers 14843, Institute of Labor Economics (IZA).
    5. Akin A. Cilekoglu, 2023. "“Labor Market Monopsony and Firm Behavior: Evidence from Spanish Exporters”," AQR Working Papers 202304, University of Barcelona, Regional Quantitative Analysis Group, revised Jul 2023.
    6. Akin A. Cilekoglu, 2023. ""Labor Market Monopsony and Firm Behavior: Evidence from Spanish Exporters"," IREA Working Papers 202307, University of Barcelona, Research Institute of Applied Economics, revised Jul 2023.
    7. Jose Garcia-Louzao & Alessandro Ruggieri, 2023. "Labor Market Competition and Inequality," CESifo Working Paper Series 10829, CESifo.
    8. Ihsaan Bassier, 2022. "Firms and inequality when unemployment is high," CEP Discussion Papers dp1872, Centre for Economic Performance, LSE.
    9. Bassier, Ihsaan, 2023. "Firms and inequality when unemployment is high," Journal of Development Economics, Elsevier, vol. 161(C).
    10. David Autor & Arindrajit Dube & Annie McGrew, 2023. "The Unexpected Compression: Competition at Work in the Low Wage Labor Market," NBER Working Papers 31010, National Bureau of Economic Research, Inc.
    11. Harkness, Susan & Popova, Daria & Avram, Silvia, 2023. "Gender differences in job mobility and pay progression in the UK," Centre for Microsimulation and Policy Analysis Working Paper Series CEMPA4/23, Centre for Microsimulation and Policy Analysis at the Institute for Social and Economic Research.
    12. Bassier, Ihsaan, 2022. "Collective bargaining and spillovers in local labor markets," LSE Research Online Documents on Economics 118057, London School of Economics and Political Science, LSE Library.
    13. Ihsaan Bassier, 2022. "Collective bargaining and spillovers in local labor markets," CEP Discussion Papers dp1895, Centre for Economic Performance, LSE.
    14. Christian Bredemeier & Babette Jansen & Roland Winkler, 2023. "Labor Market Power and the Effects of Fiscal Policy," Jena Economics Research Papers 2023-015, Friedrich-Schiller-University Jena.

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    More about this item

    Keywords

    monopsony; labour market competition; 834455;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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