- Title
- Is There Monopsony in the Labor Market? Evidence from a Natural Experiment
- Author(s)
- Douglas Staiger Douglas Staiger (Dartmouth College and NBER)
- Joanne Spetz Joanne Spetz (Public Policy Institute of California)
- Ciaran Phibbs Ciaran Phibbs (Stanford University School of Medicine)
- Abstract
- 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.
- Creation Date
- 2008-12
- Section URL ID
- IRS
- Paper Number
- 545
- URL
- https://dataspace.princeton.edu/bitstream/88435/dsp01cn69m414g/1/545.pdf
- File Function
- Jel
- J42, I11, L13
- Keyword(s)
- monopsony papers, nurses, hospitals, labor market
- Suppress
- false
- Series
- 1