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The Elasticity of Labor Supply at the Establishment Level

  • Torberg Falch

Monopsonistic wage-setting power requires that the supply of labor directed toward individual establishments is upward sloping. This study utilizes institutional features to identify the supply curve. The elasticity of labor supply is estimated using data for the Norwegian teacher labor market in a period where the only variation in the wage level was determined centrally and with information on whether there is excess demand or not at the school level. In fixed-effects models, the supply elasticity faced by individual schools is estimated to about 1.4 and is in the range 1.0-1.9 in different model specification. (c) 2010 by The University of Chicago. All rights reserved.

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File URL: http://dx.doi.org/10.1086/649905
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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 28 (2010)
Issue (Month): 2 (04)
Pages: 237-266

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Handle: RePEc:ucp:jlabec:v:28:y:2010:i:2:p:237-266
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  1. Douglas Staiger & Joanne Spetz & Ciaran Phibbs, 1999. "Is There Monopsony in the Labor Market? Evidence from a Natural Experiment," NBER Working Papers 7258, National Bureau of Economic Research, Inc.
  2. 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..
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  10. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-73, May.
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  13. Falch, Torberg & Strom, Bjarne, 2005. "Contents continuedTeacher turnover and non-pecuniary factors," Economic Modelling, Elsevier, vol. 22(4), pages 758-758, July.
  14. Harry J. Holzer & Lawrence F. Katz & Alan B. Krueger, 1991. "Job Queues and Wages," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 739-768.
  15. Bergstrom, Pal & Dahlberg, Matz & Mork, Eva, 2004. "The effects of grants and wages on municipal labour demand," Labour Economics, Elsevier, vol. 11(3), pages 315-334, June.
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  17. Dolton, Peter J & Mavromaras, Kostas G, 1994. "Intergenerational Occupational Choice Comparisons: The Case of Teachers in the UK," Economic Journal, Royal Economic Society, vol. 104(425), pages 841-63, July.
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