Dynamic Monopsony: Evidence from a French Establishment Panel

23 Pages Posted: 7 Jun 2005

See all articles by Fathi Fakhfakh

Fathi Fakhfakh

Université Paris II - Panthéon-Assas

Felix R. Fitzroy

University of St. Andrews; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 2005

Abstract

This paper uses a panel of about 6000 French establishments to test some implications of the modern theory of dynamic monopsony or upward sloping labour supply curves for average firm wages. Panel estimates provide strong evidence of a much larger long run employer size - wage effect(ESWE) than found previously, while controlling for worker quality and compensating differentials with lagged wages, and for profitability (rent sharing). Employment expansion also has a positive effect on wages, providing further evidence for upward sloping labour supply (as distinct from the effect of shocks in a perfectly competitive labour market).

Keywords: Labour supply, dynamic monopsony, firm-size wage effect

JEL Classification: C23, J30, J31

Suggested Citation

Fakhfakh, Fathi and Fitzroy, Felix R., Dynamic Monopsony: Evidence from a French Establishment Panel (June 2005). IZA Discussion Paper No. 1622. Available at SSRN: https://ssrn.com/abstract=738183

Fathi Fakhfakh

Université Paris II - Panthéon-Assas ( email )

France

Felix R. Fitzroy (Contact Author)

University of St. Andrews ( email )

St Salvator's College
St Andrews, Fife, KY16 9AJ
United Kingdom
+44 1334 462437 (Phone)
+44 1334 462444 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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