José Azar, Ioana Marinescu, Marshall Steinbaum, Bledi Taska, 07 June 2018

The effect of increasing product market concentration on the labour market is sometimes overlooked because the labour market is often assumed to be entirely competitive. This column discusses the definition of labour markets and analyses the circumstances in which employers have monopsonist power to set wages, thus contributing to the growing debate over whether market concentration might be one cause of stagnant wages and other labour trends. 

Arindrajit Dube, Jeff Jacobs, Suresh Naidu, Siddharth Suri, 21 May 2018

Monopsony refers to the market power that employers wield in labour markets. This column explores monopsony power in online labour markets, using observational and experimental data from Amazon’s Mechanical Turk platform. Both datasets suggest an employer labour supply elasticity of close to 0.1, suggesting that a 10% reduction in wages would only see a 1% drop in willing labour. This points to substantial employer market power in a supposedly frictionless setting. 

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