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Monopsony, Job Tasks and Labour Market Concentration

Author

Listed:
  • Samuel Dodini
  • Michael Lovenheim
  • Kjell Salvanes
  • Alexander Willén

Abstract

This paper extends the monopsony literature by taking a task-based approach and estimating the causal effect of concentration on labour market outcomes. Using detailed employer–employee data from Norway, we find that our job task-based measure shows lower degrees of concentration than conventional industry- and occupation-based measures. Exploiting mass lay-offs as exogenous shocks to local labour demand, we show that workers who experience mass separations in more concentrated markets have substantially worse subsequent labour market outcomes than workers in less concentrated markets. Our results point to the existence of employer market power that is driven by the concentration of skill demand across firms.

Suggested Citation

  • Samuel Dodini & Michael Lovenheim & Kjell Salvanes & Alexander Willén, 2024. "Monopsony, Job Tasks and Labour Market Concentration," The Economic Journal, Royal Economic Society, vol. 134(661), pages 1914-1949.
    • Handle: RePEc:oup:econjl:v:134:y:2024:i:661:p:1914-1949.
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    File URL: http://hdl.handle.net/10.1093/ej/ueae002
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    Cited by:

    1. Martins, Pedro S. & Melo, António, 2024. "Making their own weather? Estimating employer labour-market power and its wage effects," Journal of Urban Economics, Elsevier, vol. 139(C).

    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • 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

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