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Who Set Your Wage?

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  • David Card

Abstract

I discuss the recent literature that has led to new interest in the idea of monopsonistic wage setting. Building on advances in search theory and in models of differentiated products, researchers have used a number of different strategies to identify the elasticity of firm-specific labor supply. A growing consensus is that firms have some wage-setting power, though many questions remain about the sources of that power.

Suggested Citation

  • David Card, 2022. "Who Set Your Wage?," American Economic Review, American Economic Association, vol. 112(4), pages 1075-1090, April.
    • Handle: RePEc:aea:aecrev:v:112:y:2022:i:4:p:1075-90
    DOI: 10.1257/aer.112.4.1075
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    Cited by:

    1. Machin, Stephen, 2024. "Wage controversies: real wage stagnation, inequality and labour market institutions," LSE Research Online Documents on Economics 122220, London School of Economics and Political Science, LSE Library.
    2. Ihsaan Bassier, 2022. "Firms and inequality when unemployment is high," CEP Discussion Papers dp1872, Centre for Economic Performance, LSE.
    3. Bassier, Ihsaan, 2022. "Firms and inequality when unemployment is high," LSE Research Online Documents on Economics 121970, London School of Economics and Political Science, LSE Library.
    4. Mark Setterfield, 2023. "Inflation and distribution during the post-COVID recovery: a Kaleckian approach," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 46(4), pages 587-611, October.
    5. Ihsaan Bassier, 2022. "Collective bargaining and spillovers in local labor markets," CEP Discussion Papers dp1895, Centre for Economic Performance, LSE.
    6. Jose Garcia-Louzao & Gabriel Burdin, 2023. "Employee Owned Firms and the Careers of Young Workers," Bank of Lithuania Working Paper Series 113, Bank of Lithuania.
    7. 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.
    8. Fahn, Matthias & Seibel, Regina, 2022. "Present bias in the labor market – when it pays to be naive," Games and Economic Behavior, Elsevier, vol. 135(C), pages 144-167.
    9. Gibson, Matthew, 2021. "Employer Market Power in Silicon Valley," IZA Discussion Papers 14843, Institute of Labor Economics (IZA).
    10. Marco Fongoni & Daniel Schaefer & Carl Singleton, 2023. "Why wages don't fall in jobs with incomplete contracts," Economics Discussion Papers em-dp2023-12, Department of Economics, University of Reading.
    11. Germ'an Reyes, 2022. "Coarse Wage-Setting and Behavioral Firms," Papers 2206.01114, arXiv.org, revised Mar 2024.
    12. Matthias Fahn & Takeshi Murooka, 2022. "Informal Incentives and Labor Markets," Economics working papers 2022-05, Department of Economics, Johannes Kepler University Linz, Austria.
    13. Vitor Costa, 2023. "Local Labor Market Effects of Mergers and Acquisitions in Developing Countries: Evidence from Brazil," Papers 2306.08797, arXiv.org.
    14. 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.
    15. Riccardo Rovelli, 2024. "Labor market institutions and policies in old and new EU members," IZA World of Labor, Institute of Labor Economics (IZA), pages 222-222, January.
    16. Demir, Gökay, 2022. "Labor market frictions and spillover effects from publicly announced sectoral minimum wages," Ruhr Economic Papers 985, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

    More about this item

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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