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Employer Monopsony Power Does Not Reduce the Value of a Statistical Life

Author

Listed:
  • Cramer, Robert J

    (Vanderbilt University)

  • Kniesner, Thomas J.

    (Claremont Graduate University)

  • Viscusi, W. Kip

    (Vanderbilt University)

Abstract

Although wage rates are lower when employers have monopsony power, we find that the value of a statistical life (VSL) is not reduced when labor markets are more concentrated. Because the estimated VSL is the product of the wage and the wage-risk tradeoff rate, a greater tradeoff rate in highly concentrated U.S. labor markets produces a larger VSL. The general relationship we find is robust with respect to different labor market data. Our results provide the first evidence contradicting policy-related concerns that the VSL is lower in monopsonistic labor markets.

Suggested Citation

  • Cramer, Robert J & Kniesner, Thomas J. & Viscusi, W. Kip, 2025. "Employer Monopsony Power Does Not Reduce the Value of a Statistical Life," IZA Discussion Papers 18173, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp18173
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    Keywords

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    JEL classification:

    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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