The Dynamics of Power in Labor Markets: Monopolistic Unions Versus Monopsonistic Employers
69 Pages Posted: 14 Oct 2022
There are 3 versions of this paper
The Dynamics of Power in Labor Markets: Monopolistic Unions Versus Monopsonistic Employers
The Dynamics of Power in Labor Markets: Monopolistic Unions Versus Monopsonistic Employers
The Dynamics of Power in Labor Markets: Monopolistic Unions Versus Monopsonistic Employers
Abstract
This paper brings together the modern research on employer power and employee power by empirically examining the effects of unionization on worker earnings, employment, and inequality across differently concentrated markets. Exploiting national tax reforms to union membership dues as exogenous shocks to unionization, we show that high levels of unionization mitigate the negative wage and employment effects generated by imperfect competition. We also identify considerable effect heterogeneity with respect to worker types across differentially concentrated markets, and show that this has major implications for the role of unions in shaping labor market wage inequality.
Keywords: monopsony, skills, unions, market concentration
JEL Classification: J23, J24, J42, J51, J52, J63
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