Monopsony power, pay structure and training

Arbeitspapier

Although interest in monopsonistic influences on labour market outcomes has revived in recent years, only a few empirical studies provide direct evidence on it. This paper analyses empirically the effect of monopsony power on pay structure, using a direct measure of labour market 'thinness'. We find that having fewer competitors for skilled labour is associated at the level of the establishment with lower pay for both skilled labour and trainees, but not for unskilled labour. These findings have potentially important implications for the economic theory of training, as most recent models assume that skilled pay is set monopsonistically but both unskilled and trainee pay are determined competitively. Our results support those assumptions for skilled pay and unskilled pay, but not for trainee pay.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 5587

Classification and Topics

• Classification: Wirtschaft ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Wage Level and Structure; Wage Differentials ; Monopsony; Segmented Labor Markets
• Subject: monopsony ; wage differentials ; firm-sponsored training ; Arbeitsnachfrage ; Qualifikation ; Monopson ; Lohnstruktur ; Betriebliche Ausbildung ; Schätzung ; Schweiz

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mühlemann, Samuel ; Ryan, Paul ; Wolter, Stefan
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/51865
• URN: urn:nbn:de:101:1-201104134090
• Last update: 10.03.2025, 11:42 AM CET