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Monopsony in the UK

Author

Listed:
  • Will Abel

    () (Bank of England)

  • Silvana Tenreyro

    () (Bank of England
    Centre for Economic Policy Research (CEPR)
    Centre for Macroeconomics (CFM)
    London School of Economics and Political Science (LSE))

  • Gregory Thwaites

    () (Centre for Macroeconomics (CFM)
    London School of Economics and Political Science (LSE))

Abstract

We study the evolution and effects of monopsony power in the UK private sector labour market from 1998 to 2017. Using linked employee-firm micro-data, we find that: (1) Measures of monopsony have been relatively stable across the time period examined - rising prior to the crisis, before subsequently falling again. (2) There is substantial cross-sectional variation in monopsony at the industry level. (3) Higher levels of labour market concentration are associated with lower pay amongst workers not covered by a collective bargaining agreement. (4) For workers covered by a collective bargaining agreement, the association between labour market concentration and pay is greatly reduced and in most cases disappears. (5) The link between productivity and wage levels is weaker when labour markets are more concentrated.

Suggested Citation

  • Will Abel & Silvana Tenreyro & Gregory Thwaites, 2018. "Monopsony in the UK," Discussion Papers 1827, Centre for Macroeconomics (CFM).
  • Handle: RePEc:cfm:wpaper:1827
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    File URL: http://www.centreformacroeconomics.ac.uk/Discussion-Papers/2018/CFMDP2018-27-Paper.pdf
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    References listed on IDEAS

    as
    1. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, January.
    2. José Azar & Ioana Marinescu & Marshall I. Steinbaum, 2017. "Labor Market Concentration," NBER Working Papers 24147, National Bureau of Economic Research, Inc.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Structure vs agency in economics
      by chris in Stumbling and Mumbling on 2019-02-21 14:15:56

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    JEL classification:

    • J0 - Labor and Demographic Economics - - General

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