Is There Monopsony in the Labor Market? Evidence from a Natural Experiment / Douglas Staiger, Joanne Spetz, Ciaran Phibbs.

Format:

Book

Author/Creator:

Staiger, Douglas.

Contributor:

National Bureau of Economic Research.

Spetz, Joanne.

Phibbs, Ciaran.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7258.

NBER working paper series no. w7258

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1999.

Summary:

A variety of recent theoretical and empirical advances have renewed interest in monopsonistic models of the labor market. However, there is little direct empirical support for these models, even in labor markets that are textbook examples of monopsony. We use an exogenous change in wages at Veterans Affairs hospitals as a natural experiment to investigate the extent of monopsony in the nurse labor market. In contrast to much of the prior literature, we estimate that labor supply to individual hospitals is quite inelastic, with short-run elasticity around 0.1. We also find that non-VA hospitals responded to the VA wage change by changing their own wages.

Notes:

Print version record

July 1999.