Who Set Your Wage?
I discuss the recent literature that has led to new interest in the idea of monopsonistic wage setting. Building on advances in search theory and in models of differentiated products, researchers have used a number of different strategies to identify the elasticity of firm-specific labor supply. A growing consensus is that firms have some wage-setting power, though many questions remain about the sources of that power.
Prepared for the 2022 Annual Meeting of the American Economic Association. I am grateful to Orley Ashenfelter, Alan Manning and Pat Kline for helpful discussions over many years on the topic of this paper, and to Laura Giuliano for comments on an early draft. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
David Card, 2022. "Who Set Your Wage?," American Economic Review, vol 112(4), pages 1075-1090. citation courtesy of