Variation in Monopsonistic Behavior Across Establishments: Evidence From the Indonesian Labor Market
نویسندگان
چکیده
Recent theoretical work has shown firms have market power when hiring workers that is independent of the labor market. However, current techniques for measuring market power are unable to separate the firm determinants of market power from the market determinants. This paper proposes a new method for measuring monopsony that yields a firm-specific measurement, which I apply to the Indonesian manufacturing sector. I find over half of establishments have significant amounts of market power, and show that individual establishment characteristics explain more of the variation in monopsony than the characteristics of the labor market in which the establishment
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