Estimating the Firm's Labor Supply Curve in a "New Monopsony" Framework: School Teachers 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 take advantage of the plausibly exogenous variation in pre-negotiated district salary schedules to instrument for actual salary. Instrumental variables estimates lead to a labor supply elasticity estimate of about 3.7, suggesting the presence of significant market power for school districts, especially over more experienced teachers. The presence of monopsony power in this labor market may be partially explained by institutional features of the teacher labor market.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4271.
Length: 40 pages
Date of creation: Jun 2009
Date of revision:
Publication status: published in: Journal of Labor Economics, 2010, 28 (2), 331 - 335
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Other versions of this item:
- Michael R Ransom & David P. Sims, 2010. "Estimating the Firm's Labor Supply Curve in a "New Monopsony" Framework: Schoolteachers in Missouri," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 331-355, 04.
- Michael R. Ransom & David P. Sims, 2008. "Estimating the Firm’s Labor Supply Curve in a “New Monopsony” Framework: School Teachers in Missouri," Working Papers 1108, Princeton University, Department of Economics, Industrial Relations Section..
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-11 (All new papers)
- NEP-LAB-2009-07-11 (Labour Economics)
- NEP-URE-2009-07-11 (Urban & Real Estate Economics)
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