Minimum Wages for Ronald McDonald Monopsonies: a Theory of Monopsonistic Competition

Bhaskar, V.; To, Ted

doi:10.1111/1468-0297.00427

Cited by 219 publications

(218 citation statements)

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“…Bhaskar and To (1999) develop a model of monopsonistic competition in which workers have heterogeneous preferences over some non-wage characteristic of potential jobs. In their particular example this preference is over a measure of distance to the job (closer is better).…”

Section: Dynamic Monopsony and Labor Supply To The Firmmentioning

confidence: 99%

“…However, recent theoretical models of the labor market suggest that individual firms may face upward sloping labor supply curves even in markets with many competing firms. For example, Bhaskar and To (1999) propose a model of monopsonistic competition. In a much different approach, Manning (2003) develops the implications of a search model that also yields upward sloping labor supply curves to firm, even when there are many firms in the labor market.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Estimating the Firm’s Labor Supply Curve in a “New Monopsony” Framework: Schoolteachers in Missouri

Ransom

Sims

2010

Journal of Labor Economics

123

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. In the context of certain dynamic models, it is possible to infer the elasticity of labor supply to the firm from the elasticity of the quit rate with respect to the wage. Using this property, we estimate the average labor supply elasticity to public school districts in Missouri. We take advantage of the plausibly exogenous variation in pre-negotiated district salary schedules to instrument for actual salary. Instrumental variables estimates lead to a labor supply elasticity estimate of about 3.7, suggesting the presence of significant market power for school districts, especially over more experienced teachers. The presence of monopsony power in this labor market may be partially explained by institutional features of the teacher labor market. JEL Classification:J42, J63

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Section: Dynamic Monopsony and Labor Supply To The Firmmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Estimating the Firm’s Labor Supply Curve in a “New Monopsony” Framework: Schoolteachers in Missouri

Ransom

Sims

2010

Journal of Labor Economics

123

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“…Thus there is no market power on the side of workers. This framework extends the model of Bhaskar andTo (1999, 2003) by allowing firms to decide endogenously about technology. We simplify their model though by assuming that all workers are employed by some firm.…”

Section: The Modelmentioning

confidence: 99%

“…Our model of an oligopsonistic labour market is a variation of the model of Bhaskar and To (1999). They use a Salop model of horizontal job differentiation to show positive welfare consequences of a binding minimum wage.…”

Section: Introductionmentioning

confidence: 99%

Holdup in oligopsonistic labour markets - a new role for the minimum wage

Kaas¹,

Madden²

2008

Labour Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Holdup in Oligopsonistic Labour Markets: A New Role for the Minimum WageLeo Kaas Paul Madden The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. ABSTRACT Holdup in Oligopsonistic Labour Markets: A New Role for the Minimum WageWe consider a labour market model of oligopsonistic wage competition and show that there is a holdup problem although workers do not have any bargaining power. When a firm invests more, it pays a higher wage in order to attract workers from competitors. Because workers participate in the returns on investment while only firms bear the costs, investment is inefficiently low. A binding minimum wage can achieve the first-best level of investment, both in the short run for a given number of firms and in the long run when the number of firms is endogenous.JEL Classification: D43, J48

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“…In Bhaskar and To (1999) k would reflect firm specific prefe rences, while Burdett and Mortensen (1998) develop an equilibrium search model where firms have upward sloping supply curves. 5 Manning (2003) shows that a firm with convex 5 In this model a minimum wage will increase employment if there is heterogeneity over workers reservation wages.…”

Section: Section Ii: a Partial Equilibrium Monopsony Modelmentioning

confidence: 99%