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Labour Market Polarisation, Job Tasks and Monopsony Power

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  • Bachmann, Ronald

    (RWI)

  • Demir, Gökay

    (IZA)

  • Frings, Hanna

    (Federal Ministry of Labor and Social Affairs (BMAS), Germany)

Abstract

Using a semi-structural approach based on a dynamic monopsony model, we examine to what extent workers performing different job tasks are exposed to different degrees of monopsony power, and whether these differences in monopsony power have changed over the last 30 years. We find that workers performing mostly non-routine cognitive tasks are exposed to a higher degree of monopsony power than workers performing routine or non-routine manual tasks. Job-specific human capital and non-pecuniary job characteristics are the most likely explanations for this result. We find no evidence that labour market polarisation has increased monopsony power over time.

Suggested Citation

  • Bachmann, Ronald & Demir, Gökay & Frings, Hanna, 2020. "Labour Market Polarisation, Job Tasks and Monopsony Power," IZA Discussion Papers 13989, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13989
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    Cited by:

    1. Bassier, Ihsaan, 2022. "Firms and inequality when unemployment is high," LSE Research Online Documents on Economics 117999, London School of Economics and Political Science, LSE Library.
    2. Jorge Davalos & Ekkehard Ernst, 2021. "How has labour market power evolved? Comparing labour market monopsony in Peru and the United States," Papers 2103.15183, arXiv.org.
    3. Blömer, Maximilian J. & Guertzgen, Nicole & Pohlan, Laura & Stichnoth, Holger & van den Berg, Gerard J., 2024. "Unemployment effects of the German minimum wage in an equilibrium job search model," Labour Economics, Elsevier, vol. 91(C).
    4. Kovalenko, Tim & Sauerbier, Timo & Schröpf, Benedikt, 2024. "The fall and rebound of average establishment size in West Germany," Discussion Papers 11/2024, Deutsche Bundesbank.
    5. Ihsaan Bassier, 2022. "Firms and inequality when unemployment is high," CEP Discussion Papers dp1872, Centre for Economic Performance, LSE.
    6. Jose Garcia-Louzao & Alessandro Ruggieri, 2023. "Labor Market Competition and Inequality," Bank of Lithuania Working Paper Series 117, Bank of Lithuania.
    7. Bassier, Ihsaan, 2023. "Firms and inequality when unemployment is high," Journal of Development Economics, Elsevier, vol. 161(C).
    8. Carolin Linckh & Samuel Muehlemann & Harald Pfeifer, 2024. "Beggars cannot be choosers: Labor market tightness and hiring standards, wages, and hiring costs," Economics of Education Working Paper Series 0217, University of Zurich, Department of Business Administration (IBW).
    9. Kovalenko, Tim & Sauerbier, Timo & Schröpf, Benedikt, 2023. "The fall and rebound of average establishment size in West Germany," Discussion Papers 126, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    10. Bachmann, Ronald & Heinze, Inga & Hörnig, Lukas & Klauser, Roman, 2025. "Erfolgreiche Jobwechsel. Wie berufliche Mobilität Einkommen und Arbeitszufriedenheit steigert," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 322261 edited by Bertelsmann Stiftung, January.
    11. Bassier, Ihsaan, 2022. "Firms and inequality when unemployment is high," LSE Research Online Documents on Economics 121970, London School of Economics and Political Science, LSE Library.
    12. Han, Qingyang, 2024. "Estimating labor market monopsony power from a forward-looking perspective," Economics Letters, Elsevier, vol. 244(C).

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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