TY  - JOUR
AU  - Staiger,Douglas
AU  - Spetz,Joanne
AU  - Phibbs,Ciaran
TI  - Is There Monopsony in the Labor Market?  Evidence from a Natural Experiment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7258
PY  - 1999
Y2  - July 1999
UR  - http://www.nber.org/papers/w7258
L1  - http://www.nber.org/papers/w7258.pdf
N1  - Author contact info:
Douglas O. Staiger
Dartmouth College
Department of Economics
HB6106, 301 Rockefeller Hall
Hanover, NH 03755-3514
Tel: 603/646-2979
Fax: 603/646-2122
E-Mail: douglas.staiger@dartmouth.edu

Joanne Spetz
E-Mail: jojo@alum.mit.edu

Ciaran Phibbs
Health Economics Resource Center (152)
VA Medical Center, 795 Willow Road
Menlo Park, CA  94025
E-Mail: cphibbs@stanford.edu
AB  - 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.
ER  -