Monopsony in local labour markets
We investigate employer monopsony power in local labour markets in the UK. We propose a model in which market power stems from idiosyncratic worker preferences over non-wage attributes of jobs, including the commuting distance. This set-up delivers point-specific, overlapping local labour markets. T...
| Main Authors: | , |
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| Format: | Journal article |
| Language: | English |
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Oxford University Press
2024
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| _version_ | 1811140077852557312 |
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| author | Manning, A Petrongolo, B |
| author_facet | Manning, A Petrongolo, B |
| author_sort | Manning, A |
| collection | OXFORD |
| description | We investigate employer monopsony power in local labour markets in the UK. We propose a model in which market power stems from idiosyncratic worker preferences over non-wage attributes of jobs, including the commuting distance. This set-up delivers point-specific, overlapping local labour markets. The resulting concentration index reflects the intensity of commuting flows between local areas, and is lower than the conventional index based on self-contained, non-overlapping areas because commuting across local areas expand workers’ outside options. We estimate that employment concentration in local labour markets was slightly falling over the past 2 decades. The model-based concentration index is negatively correlated to local wages and performs better than other purely local concentration measures. However, in quantitative terms, the observed fall in concentration can predict only a negligible increase in wages. |
| first_indexed | 2024-09-25T04:16:15Z |
| format | Journal article |
| id | oxford-uuid:ebfc4787-1526-4d88-b54f-b391c9907be5 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-09-25T04:16:15Z |
| publishDate | 2024 |
| publisher | Oxford University Press |
| record_format | dspace |
| spelling | oxford-uuid:ebfc4787-1526-4d88-b54f-b391c9907be52024-07-17T20:06:17ZMonopsony in local labour marketsJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:ebfc4787-1526-4d88-b54f-b391c9907be5EnglishJisc Publications RouterOxford University Press2024Manning, APetrongolo, BWe investigate employer monopsony power in local labour markets in the UK. We propose a model in which market power stems from idiosyncratic worker preferences over non-wage attributes of jobs, including the commuting distance. This set-up delivers point-specific, overlapping local labour markets. The resulting concentration index reflects the intensity of commuting flows between local areas, and is lower than the conventional index based on self-contained, non-overlapping areas because commuting across local areas expand workers’ outside options. We estimate that employment concentration in local labour markets was slightly falling over the past 2 decades. The model-based concentration index is negatively correlated to local wages and performs better than other purely local concentration measures. However, in quantitative terms, the observed fall in concentration can predict only a negligible increase in wages. |
| spellingShingle | Manning, A Petrongolo, B Monopsony in local labour markets |
| title | Monopsony in local labour markets |
| title_full | Monopsony in local labour markets |
| title_fullStr | Monopsony in local labour markets |
| title_full_unstemmed | Monopsony in local labour markets |
| title_short | Monopsony in local labour markets |
| title_sort | monopsony in local labour markets |
| work_keys_str_mv | AT manninga monopsonyinlocallabourmarkets AT petrongolob monopsonyinlocallabourmarkets |