Dynamic Monopsony: Evidence from a French Establishment Panel

13 Pages Posted: 17 Jan 2007

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

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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 sizewage 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).

Suggested Citation

Fakhfakh, Fathi and Fitzroy, Felix R., Dynamic Monopsony: Evidence from a French Establishment Panel. Economica, Vol. 73, No. 291, pp. 533-545, August 2006. Available at SSRN: https://ssrn.com/abstract=918586 or http://dx.doi.org/10.1111/j.1468-0335.2006.00523.x

Fathi Fakhfakh (Contact Author)

Université Paris II - Panthéon-Assas ( email )

France

Felix R. Fitzroy

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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