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Wal-Mart’s Monopsony Power in Local Labor Markets

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  • Bonanno, Alessandro
  • Lopez, Rigoberto

Abstract

Despite considerable debate as to Wal-Mart’s impact on retail workers, to date there has been little structural analysis on the topic. This paper measures and tests for Wal-Mart’s monopsony power in local labor markets using a dominant-firm model and data on contiguous U.S. counties where the company operates. Empirical results show that Wal-Mart’s monopsony power over workers varies significantly across the country, being higher in rural counties, particularly in the south. For instance, Wal-Mart’s buying power index in labor markets in rural southern central states is estimated to be 6% or higher while the impact on northeastern states’ wages is negligible. The results suggest that this is not a nationwide problem.

Suggested Citation

  • Bonanno, Alessandro & Lopez, Rigoberto, 2008. "Wal-Mart’s Monopsony Power in Local Labor Markets," Research Reports 149210, University of Connecticut, Food Marketing Policy Center.
  • Handle: RePEc:ags:uconnr:149210
    DOI: 10.22004/ag.econ.149210
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    File URL: https://ageconsearch.umn.edu/record/149210/files/rr103.pdf
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    Cited by:

    1. Alessandro Bonanno, 2010. "An empirical investigation of Wal-Mart's expansion into food retailing," Agribusiness, John Wiley & Sons, Ltd., vol. 26(2), pages 220-242.

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