Job quality and wages in duopsony
In a simple oligopsonistic model, firms compete for labour through wages and job qualities. We modify the product market model developed by Vandenbosch/Weinberg 1995 and apply it to the job market with jobs being defined by two vertically differentiated non-wage characteristics. Workers differ in their valuation of these two characteristics but do not differ in their productivity. In equilibrium firms offer different wages and differ in only one of these non-wage characteristics. Whereas our labour market model is based on firms, we apply subclasses according to the UK SIC(2003) in our empirical analysis. When comparing subclasses within selected sectors (WERS) we found evidence that firms compete in both wages and job qualities.
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