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The elasticity of labor supply at the establishment level

  • TORBERG FALCH

    (Norwegian University of Science and Technology)

Monopsonistic wage-setting power requires that the supply of labor directed toward individual establishments is upward sloping. This paper utilizes institutional features to identify the supply curve. The elasticity of labor supply is estimated using data for the Norwegian teacher labor market in a period where the only variation in the wage level was determined centrally, and with information on whether there is excess demand or not at the school level. In fixed effects models, the supply elasticity faced by individual schools is estimated to about 1.5, and is in the range 1.0–1.9 in different model specification.

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File URL: http://arks.princeton.edu/ark:/88435/dsp01s4655g58f
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Paper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number 1106.

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Date of creation: Dec 2008
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Handle: RePEc:pri:indrel:dsp01s4655g58f
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