IDEAS home Printed from https://ideas.repec.org/p/cep/cepdps/dp2108.html
   My bibliography  Save this paper

Estimating labour market power: the long and short of it

Author

Listed:
  • Ihsaan Bassier
  • Alan Manning

Abstract

This paper combines two empirical traditions in the study of employer monopsony power. One tradition estimates static firm labour supply elasticities, while the other focuses on labour market flows, estimating separations and hires elasticities. We nest these two approaches in a simple dynamic model for firm-level labour supply in which the short- and long-run labour supply elasticities are different. Using matched employer-employee data from the UK, we estimate a short-run labour supply elasticity of 1-2 and a longrun elasticity of 5-6. Estimating a static labour supply curve estimates a weighted combination of the short- and long-run elasticities. Separations and hiring elasticities estimated on the same data are consistent with the long-run elasticity but are not informative about the short-run.

Suggested Citation

  • Ihsaan Bassier & Alan Manning, 2025. "Estimating labour market power: the long and short of it," CEP Discussion Papers dp2108, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp2108
    as

    Download full text from publisher

    File URL: https://cep.lse.ac.uk/pubs/download/dp2108.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cep:cepdps:dp2108. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://cep.lse.ac.uk/_new/publications/discussion-papers/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.