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Research ArticleArticles
Open Access

Monopsony in Movers: The Elasticity of Labor Supply to Firm Wage Policies

Ihsaan Bassier, Arindrajit Dube and Suresh Naidu
Published online before print April 13, 2021, 0319-10111R1; DOI: https://doi.org/10.3368/jhr.monopsony.0319-10111R1
Ihsaan Bassier
University of Massachusetts, Amherst
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Arindrajit Dube
University of Massachusetts, Amherst, NBER, IZA
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Suresh Naidu
Columbia University, NBER
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Abstract

We estimate the impact of the firm component of hourly wage variation on separations from matched Oregon employer-employee data. We use both firm fixed effects estimated from a wage equation as well as a matched IV event study around employment transitions between firms. Separations decline with firm wage policies: the implied firm-level labor supply elasticities are around 4, consistent with recent quasi-experimental evidence, but 3 to 4 times larger than existing estimates using individual wages. We find that monopsonistic competition is pervasive, even in low-wage, high turnover sectors, but with little heterogeneity by labor market concentration.

JEL No
  • J2
  • J3
  • J31
  • J42

This open access article is distributed under the terms of the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0) and is freely available online at: http://jhr.uwpress.org

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Journal of Human Resources: 60 (3)
Journal of Human Resources
Vol. 60, Issue 3
1 May 2025
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Monopsony in Movers: The Elasticity of Labor Supply to Firm Wage Policies
Ihsaan Bassier, Arindrajit Dube, Suresh Naidu
Journal of Human Resources Apr 2021, 0319-10111R1; DOI: 10.3368/jhr.monopsony.0319-10111R1

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Monopsony in Movers: The Elasticity of Labor Supply to Firm Wage Policies
Ihsaan Bassier, Arindrajit Dube, Suresh Naidu
Journal of Human Resources Apr 2021, 0319-10111R1; DOI: 10.3368/jhr.monopsony.0319-10111R1
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Keywords

  • J2
  • J3
  • J31
  • J42
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