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DeFiPP Seminar - Jan Eeckhout (Pompeu Fabra University)

What drives Wages stagnation: Monopsony or Monopoly ?

Catégorie : conférence/cours/séminaire (spécialisé)
Date : 01/02/2022 16:00 - 01/02/2022 17:30
Lieu : Salle C. Joset
Orateur(s) : Jan Eeckhout
Organisateur(s) : Christian Keidaisch
Abstract: 

 

Wages for the vast majority of workers have stagnated since the 1980s. We offer two coexisting explanations based on rising market power: 1. Monopsony, where dominant firms exploit the limited mobility of their own workers to pay lower wages; and 2. Monopoly, where dominant firms charge too high prices for what they sell, which lowers production and the demand for labor, and hence equilibrium wages economy-wide. We offer a novel way to jointly model and measure monopsony and monopoly and their contribution to wages. Our model provides a mechanism that explains the decoupling of productivity and wage growth. Using Census data for the period 1997-2016, we estimate that 1/5 of the wage stagnation is due to the rise of monopsony and 4/5 is due to the rise of monopoly. 

Contact : Christian Keidaisch - christian.keidaisch@unamur.be
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