#Monopsony at #NBERSI! New work in progress by @EDerenoncourt & co-authors shows that voluntary wage increases by the likes of Amazon and Walmart force competitors to post higher wages (see Figure) & leads to significant wage increases for workers in affected markets in CPS.

This is consistent with #monopsony power because it suggests that employers had room to increase wages. Just to double check though, I wonder how this affected employment levels in affected markets as measured e.g. in the OES.

This graph shows that Amazon’s competitors followed Amazon in paying $15, so that Amazon’s wage plays a similar role to state minimum wages as shown by @arindube & co-auhtors.

Finally, the impact of Amazon’s $15 #minimumwage in competitors’s wages was larger in more concentrated labor markets. The authors’s interpretation is (I think) that it’s because Amazon is a more important market player in more concentrated labor markets.

This is a sensible interpretation but does it have to go that way? I wonder because more concentrated labor markets also have lower labor supply elasticities as we show w. @joseazar and @Econ_Marshall. https://www.aeaweb.org/articles?id=10.1257/pandp.20191068">https://www.aeaweb.org/articles...

If labor supply elasticity is lower in more concentrated markets, then conpetitors may not need to react as strongly. Just thinking through different mechanisms here. Any thoughts @EDerenoncourt?