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Oligopsony and the Distribution of Wages

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  • Venkataraman Bhaskar

    (Faculty of Economics, University of Tokyo)

  • Ted To

    (University of Warwick)

Abstract

We present a simple model which is consistent with the evidence on wage dispersion, including persistent inter- and intra-industry wage differentials, and the effects of minimum wages on this distribution. Our model assumes that workers are equally able but have heterogeneous preferences for non-wage characteristics, while employers have heterogeneous productivity characteristics. This results in a model of labor market oligopsony where "inside" and "outside" forces interact in wage determination, with results which are consistent with the empirical evidence.

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File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/99/cf42/contents.htm
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Bibliographic Info

Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-42.

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Length: 19 pages
Date of creation: Mar 1999
Date of revision:
Handle: RePEc:tky:fseres:99cf42

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  7. Bhaskar, V & To, Ted, 1999. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Economic Journal, Royal Economic Society, vol. 109(455), pages 190-203, April.
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