Who Set Your Wage?
American Economic Review · 2022 · Volume 112 · Issue 4
Abstract
I discuss the recent literature that has led to new interest in the idea of monopsonistic wage setting. Building on advances in search theory and in models of differentiated products, researchers have used a number of different strategies to identify the elasticity of firm-specific labor supply. A growing consensus is that firms have some wage-setting power, though many questions remain about the sources of that power.
Keywords
History of Economic Thought: Microeconomics, Firm Behavior: Theory, Production, Cost, Capital, Total Factor, and Multifactor Productivity, Capacity, Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection, Time Allocation and Labor Supply, Wage Level and Structure, Wage Differentials, Monopsony, Segmented Labor Markets
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