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Employer monopsony power in the labor market for undocumented workers

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Author Info
Julie L. Hotchkiss
Myriam Quispe-Agnoli

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Abstract

Using matched employer-employee data from the state of Georgia, this paper investigates the potential for employer monopsony power in the labor market for undocumented workers. We find that the labor supply elasticity of undocumented workers is about 13 percent lower than that estimated for documented workers, suggesting that at least some of the observed wage gap between documented and undocumented workers can be explained by firms' exploiting their monopsony power. There is also evidence of some displacement, with the hiring of undocumented workers being associated with a small amount of documented worker separation.

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Paper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number 2009-14.

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Date of creation: 2009
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Handle: RePEc:fip:fedawp:2009-14

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Keywords: Labor market;

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  2. Raphael, Steven & Riker, David A., 1999. "Geographic Mobility, Race, and Wage Differentials," Journal of Urban Economics, Elsevier, vol. 45(1), pages 17-46, January. [Downloadable!] (restricted)
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  7. Oded Stark, 2007. "Work Effort, Moderation in Expulsion, and Illegal Migration," Review of Development Economics, Blackwell Publishing, vol. 11(4), pages 585-590, November. [Downloadable!] (restricted)
  8. Boris Hirsch & Thorsten Schank & Claus Schnabel, 2006. "Gender Differences in Labor Supply to Monopsonistic Firms: An Empirical Analysis Using Linked Employer-Employee Data from Germany," Working Papers 006, Bavarian Graduate Program in Economics (BGPE). [Downloadable!]
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  9. J. Benjamin & P. Chinloy & G. Jud & D. Winkler, 2007. "Do Some People Work Harder than Others? Evidence from Real Estate Brokerage," The Journal of Real Estate Finance and Economics, Springer, vol. 35(1), pages 95-110, July. [Downloadable!] (restricted)
  10. Julie L. Hotchkiss & Robert E. Moore, 2007. "Assessing the welfare impact of the 2001 tax reform on dual-earner families," Working Paper 2007-27, Federal Reserve Bank of Atlanta. [Downloadable!]
  11. Brown, J. David & Hotchkiss, Julie L. & Quispe-Agnoli, Myriam, 2009. "Undocumented Worker Employment and Firm Survival," IZA Discussion Papers 3936, Institute for the Study of Labor (IZA). [Downloadable!]
  12. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October. [Downloadable!] (restricted)
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  13. Machin, Stephen & Manning, Alan, 1992. "Testing Dynamic Models of Worker Effort," Journal of Labor Economics, University of Chicago Press, vol. 10(3), pages 288-305, July. [Downloadable!] (restricted)
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