Monopsony in Motion: Imperfect Competition in Labor Markets

Alan Manning; Alan Manning

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Monopsony in Motion

Imperfect Competition in Labor Markets

and

Language: English

Published/Copyright: 2013

About this book

What happens if an employer cuts wages by one cent? Much of labor economics is built on the assumption that all the workers will quit immediately. Here, Alan Manning mounts a systematic challenge to the standard model of perfect competition. Monopsony in Motion stands apart by analyzing labor markets from the real-world perspective that employers have significant market (or monopsony) power over their workers. Arguing that this power derives from frictions in the labor market that make it time-consuming and costly for workers to change jobs, Manning re-examines much of labor economics based on this alternative and equally plausible assumption.

The book addresses the theoretical implications of monopsony and presents a wealth of empirical evidence. Our understanding of the distribution of wages, unemployment, and human capital can all be improved by recognizing that employers have some monopsony power over their workers. Also considered are policy issues including the minimum wage, equal pay legislation, and caps on working hours. In a monopsonistic labor market, concludes Manning, the "free" market can no longer be sustained as an ideal and labor economists need to be more open-minded in their evaluation of labor market policies. Monopsony in Motion will represent for some a new fundamental text in the advanced study of labor economics, and for others, an invaluable alternative perspective that henceforth must be taken into account in any serious consideration of the subject.

Author / Editor information

Alan Manning is Professor of Economics and Director of the Labour Markets Programme in the Centre for Economic Performance at the London School of Economics. He has published numerous papers on labor economics.

Reviews

"The manner of Manning's exposition of his arguments advocating the monopsonist view is impressive. . . . [I]t will be hard for even the utmost skeptic and expert not to come away having learnt something more about labor economics."---Eric A. Strobl, Journal of Economic Behavior and Organization --- "Given the breadth and depth of the issues Manning covers--clearly, a staggering amount of work went into this book--even skeptical readers will not be able to dismiss his theory lightly. . . . The book is so well written that even the most complicated material in it is readable. The presentation is also commendably well balanced. . . . [It] deserves a place on our bookshelves alongside the other seminal works in labor economics."---Michael Rizzo, Industrial and Labor Relations Review

Topics

Publicly Available

Frontmatter
i

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Contents
vii

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Preface
xi

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Part One BASICS
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1 Introduction
3

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2 Simple Models of Monopsony and Oligopsony
29

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3 Efficiency in Oligopsonistic Labor Markets
56

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4 The Elasticity of the Labor Supply Curve to an Individual Firm
80

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Part Two THE STRUCTURE OF WAGES
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5 The Wage Policies of Employers
117

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6 Earnings and the Life Cycle
141

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7 Gender Discrimination in Labor Markets
193

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8 Employers and Wages
217

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Part Three LABOR DEMAND AND SUPPLY
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9 Unemployment, Inactivity, and Labor Supply
239

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10 Vacancies and the Demand for Labor
269

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11 Human Capital and Training
301

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Part Four WAGE-SETTING INSTITUTIONS AND CONCLUSIONS
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12 The Minimum Wage and Trade Unions
325

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13 Monopsony and the Big Picture
360

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Data Sets Appendix
368

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Bibliography
379

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Index
397

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Publishing information

Pages and Images/Illustrations in book

eBook published on:

December 3, 2013

eBook ISBN:

9781400850679

Edition:

Course Book

Pages and Images/Illustrations in book

https://doi.org/10.1515/9781400850679

eBook ISBN: 9781400850679

Keywords for this book

Employment; Wage; Monopsony; Minimum wage; Unemployment; Reservation wage; Efficiency wage; Involuntary unemployment; Market power; Labour supply; Wage compression; Job security; Compensating differential; Marginal product; Rate of exploitation; Gender pay gap; Maximum wage; Demand For Labor; Human capital; Union wage premium; Oligopsony; Inequality of bargaining power; Marginal rate of substitution; Economic surplus; Marginal cost; Profit maximization; Utility; Externality; Exhaustion; Cultural lag; Labor demand; Supply (economics); Bilateral monopoly; Unemployment in the United States; Indifference curve; Profit (economics); Opportunity cost; Shortage; Cost curve; Search theory; Economics; Excess supply; Perfect competition; Supply shock; Risk aversion; Ordinary least squares; Oligopoly; Frictional unemployment; Stylized fact; Labour power; Partial equilibrium; Trade union; Salary; Market failure; Natural rate of unemployment; Elasticity of substitution; Productivity; Dynamic programming; Working poor; Price elasticity of supply; Production function; Layoff; Economic interventionism; Spillover effect; Envelope theorem; Downside risk; Negative binomial distribution; Tax; Neoclassical economics; Demand curve

Audience(s) for this book

For an expert adult audience, including professional development and academic research

Princeton University Press

Monopsony in Motion

Overview

About this book

Author / Editor information

Reviews

Topics

Table of contents

Frontmatter

Contents

Preface

1 Introduction

2 Simple Models of Monopsony and Oligopsony

3 Efficiency in Oligopsonistic Labor Markets

4 The Elasticity of the Labor Supply Curve to an Individual Firm

5 The Wage Policies of Employers

6 Earnings and the Life Cycle

7 Gender Discrimination in Labor Markets

8 Employers and Wages

9 Unemployment, Inactivity, and Labor Supply

10 Vacancies and the Demand for Labor

11 Human Capital and Training

12 The Minimum Wage and Trade Unions

13 Monopsony and the Big Picture

Data Sets Appendix

Bibliography

Index

Bibliographic data