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Monopsony in academia and the gender pay gap: Evidence from California

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  • Yu, Zhanhan
  • Flores-Lagunes, Alfonso

Abstract

We investigate monopsony power in a highly skilled labor market made up of tenure-ranked faculty in the University of California system, and analyze differential monopsony power exposure by gender. We infer the campus-level labor supply elasticity by estimating the elasticity of separations utilizing individual-level faculty data and two instruments based on campus revenues and salary scales. We find that the “exploitation rate”, a common measure of monopsony power, is about 7% for tenure-ranked faculty. There is a statistically significant difference in the monopsony power experienced by male and female faculty that appears to account for a relatively small percentage of the observed gender pay gap. We provide evidence that the gender difference in monopsony power experienced may be driven by academic fields that offer more options outside of academia.

Suggested Citation

  • Yu, Zhanhan & Flores-Lagunes, Alfonso, 2026. "Monopsony in academia and the gender pay gap: Evidence from California," Labour Economics, Elsevier, vol. 100(C).
    • Handle: RePEc:eee:labeco:v:100:y:2026:i:c:s0927537126000369
    DOI: 10.1016/j.labeco.2026.102885
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