NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Is There Monopsony in the Labor Market? Evidence from a Natural Experiment

Douglas Staiger, Joanne Spetz, Ciaran Phibbs

NBER Working Paper No. 7258
Issued in July 1999
NBER Program(s):   HE

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.

download in pdf format
   (80 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (80 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7258

Published: Douglas O. Staiger & Joanne Spetz & Ciaran S. Phibbs, 2010. "Is There Monopsony in the Labor Market? Evidence from a Natural Experiment," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 211-236, 04.

Users who downloaded this paper also downloaded these:
Borjas w9755 The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market
Brown, Coile, and Weisbenner w12386 The Effect of Inheritance Receipt on Retirement
Sullivan w3031 Monopsony Power in the Market for Nurses
Alesina, Algan, Cahuc, and Giuliano w15747 Family Values and the Regulation of Labor
Neumark and Wascher w4617 Minimum Wage Effects and Low-Wage Labor Markets: A Disequilibrium Approach
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us