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New Market Power Models and Sex Differences in Pay

  • Michael R Ransom
  • Ronald L. Oaxaca

In the context of certain models, it is possible to infer the elasticity of labor supply to the firm from the elasticity of the quit rate with respect to the wage. We use this strategy to estimate the elasticity of labor supply for men and women workers at a chain of grocery stores, identifying separation elasticities from differences in wages and separation rates across different job titles within the firm. We estimate that women have lower elasticities, so a Robinson-style monopsony model can explain reasonably well the lower relative pay of women in the retail grocery industry. (c) 2010 by The University of Chicago.

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File URL: http://dx.doi.org/10.1086/651245
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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: 267-289

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Handle: RePEc:ucp:jlabec:v:28:y:2010:i:2:p:267-289
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  1. Schlicht, Ekkehart, 1982. "A Robinsonian Approach to Discrimination," Munich Reprints in Economics 3351, University of Munich, Department of Economics.
  2. 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.
  3. Bhaskar, V & To, Ted, 1999. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Economic Journal, Royal Economic Society, vol. 109(455), pages 190-203, April.
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  5. Meitzen, Mark E, 1986. "Differences in Male and Female Job-quitting Behavior," Journal of Labor Economics, University of Chicago Press, vol. 4(2), pages 151-67, April.
  6. Michael Ransom & Ronald L. Oaxaca, 2005. "Intrafirm Mobility and Sex Differences in Pay," ILR Review, Cornell University, ILR School, vol. 58(2), pages 219-237, January.
  7. Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-33, April.
  8. Peter Kuhn, 2004. "Is monopsony the right way to model labor markets? a review of Alan Manning's monopsony in motion," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 11(3), pages 369-378.
  9. 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.
  10. Bowlus, Audra J, 1997. "A Search Interpretation of Male-Female Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 625-57, October.
  11. Parsons, Donald O, 1972. "Specific Human Capital: An Application to Quit Rates and Layoff Rates," Journal of Political Economy, University of Chicago Press, vol. 80(6), pages 1120-43, Nov.-Dec..
  12. William M. Boal & Michael R. Ransom, 1997. "Monopsony in the Labor Market," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 86-112, March.
  13. Francine D. Blau & Lawrence M. Kahn, 1981. "Race and Sex Differences in Quits by Young Workers," ILR Review, Cornell University, ILR School, vol. 34(4), pages 563-577, July.
  14. Alan Manning & Ted To, 2002. "Oligopsony and Monopsonistic Competition in Labor Markets," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 155-174, Spring.
  15. Viscusi, W Kip, 1980. "Sex Differences in Worker Quitting," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 388-98, August.
  16. Pencavel, John H, 1972. "Wages, Specific Training, and Labor Turnover in US Manufacturing Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(1), pages 53-64, February.
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