Labour market oligopsonistic competition: The effect of worker immobility on wages |
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Authors: | Marios Michaelides |
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Institution: | 1. Dept. of Science and Engineering, Iwate University, Ueda 4-3-5, Morioka, Iwate, 020-8551, Japan;2. Department of Frontier Materials and Function Engineering, Graduate School of Engineering, Iwate University, Ueda 4-3-5, Morioka, Iwate, 020-8551, Japan;1. University of Pristina, Faculty of Natural Sciences, Lole Ribara 29, 38220 Kosovska Mitrovica, Serbia;2. University of Kragujevac, Faculty of Science, R. Domanovic 12, 34000 Kragujevac, Serbia |
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Abstract: | We suggest that firms in a local labour market may be able to exploit worker mobility costs and offer immobile workers wages that are lower than their marginal product. If so, the ability of employers to exploit worker immobility in setting wages would decline in the competitiveness of the local labour market. We test this intuition using a measure of individual mobility costs and measures of local labour market competition. Our findings suggest that worker immobility causes substantial wage variation across workers in small, weakly competitive markets, and in occupations where wages are individually bargained. |
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