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The Elasticity of Labor Supply at the Establishment Level

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  • Torberg Falch

Abstract

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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  • Torberg Falch, 2010. "The Elasticity of Labor Supply at the Establishment Level," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 237-266, April.
    • Handle: RePEc:ucp:jlabec:v:28:y:2010:i:2:p:237-266
    DOI: 10.1086/649905
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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • I29 - Health, Education, and Welfare - - Education - - - Other
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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