Labor Market Power Research Articles

Analysing the ‘migrant work ethic’ – Comparing managers’ perceptions of local workers and Central and Eastern European migrants in the United Kingdom

The 2004 expansion of the European Union saw over one million people from Central and Eastern Europe register to work in the United Kingdom. Early studies into this phenomenon found a highly qualified migrant workforce taking low skilled roles, and research in regions of high unemployment saw migrant workers viewed favourably by managers as compared with locals. Using a qualitative case study approach, this paper significantly adds to regional studies of migration to investigate comparisons of migrant and local workers in regions of low unemployment, where managerial views towards locals are not as negative. The paper finds that, owing to low levels of labour market power as a result of basic English language skills and problems of transferability of qualifications, migrants are finding new ways of signalling their higher productivity. These are low levels of absence and a willingness to work longer hours, frequently termed a ‘good work ethic’ by managers, and used to positively distinguish migrant workers even in regions of low unemployment. The paper then investigates what happens to the demonstration of this ‘work ethic’ over time, finding that these behaviours are less likely to be used as labour market power increases.

Three Dualization Processes in Korea: The Labor Market, Welfare Policy, and Political Representation

This article examines the nature and trends of economic inequality in Korean society in terms of “dualization” trends in three dimensions: the labor market, social welfare, and political power. First, for the labor market, the article analyzes the various differences in income and access to vocational training between standard and non-standard workers. Secondly, it examines social welfare divides between standard and non-standard workers. Finally, it traces the changes in union membership and the rate of election abstention among the different population groups. There are clear divides in the labor market, social welfare and political power between “insiders” and “outsiders.” These results confirm previous theories that suggested that a high level of protection for insiders and lack of an active labor market policy (ALMP) lead to a high level of dualization. However, this article also suggests that more sophisticated analysis is required to grasp the different dimensions of dualization and its broader consequences.

The state of domestic affairs: Housework, gender and state-level institutional logics

Multi-level cross-national research consistently shows individual housework arrangements are structured by broader contexts of equality. Across this body of research, the United States is treated as a single entity. Yet, individual-level housework time may vary by state-to-state differences in institutional market, family and legislative logics. To test these relationships, we pair individual-level data from the American Time Use Survey (2003–2012; aged 18 to 64 n = 106,190) with three state-level indices – female labor force empowerment, family traditionalism and state government liberalism. For market institutional logics, we find wives and husbands spend more but mothers less time in housework in states where women have more labor market power. For family logics, we find mothers spend more and husbands less time in housework in more traditional states. For legislative logics, we find women and husbands spend more time in housework in more liberal states. Our results highlight the importance of state-to-state institutional logics on individuals' housework time.

Eficiencia técnica en la industria manufacturera en México

The document estimates simultaneously a model of stochastic production frontier and a model of technical inefficiency for 25 Mexican manufacturing industries from 1985 to 2009. It was determined the relevance of inputs in the aggregated value, the variables of inefficiency, the levels of efficiency en each industry, groups of efficient industries, and the profiles of the industries. The results show that human capital, unqualified personnel and capital boost efficiency, while labor productivity and market power tend to reduce technical inefficiency. Among policy measure aimed to achieve the “best practice” are adequate input provision, access to domestic and international markets, credit facilities and employees training programs.

Firm market power and the earnings distribution

Using the Longitudinal Employer Household Dynamics (LEHD) data from the United States Census Bureau, I compute firm-level measures of labor market (monopsony) power. To generate these measures, I extend the empirical strategy of Manning (2003) and estimate the labor supply elasticity facing each private non-farm firm in the U.S. While a link between monopsony power and earnings has traditionally been assumed, I provide the first direct evidence of the positive relationship between a firm's labor supply elasticity and the earnings of its workers. I also contrast the dynamic model strategy with the more traditional use of concentration ratios to measure a firm's labor market power. In addition, I provide several alternative measures of labor market power which account for potential threats to identification such as endogenous mobility. Finally, I construct a counterfactual earnings distribution which allows the effects of firm market power to vary across the earnings distribution.I estimate the average labor supply elasticity to the firm to be 1.08, however my findings suggest that there is significant variability in the distribution of firm market power across U.S. firms, and that dynamic monopsony models are superior to the use of concentration ratios in evaluating a firm's labor market power. I find that a one-unit increase in the labor supply elasticity to the firm is associated with earnings gains of between 5 and 16%. While nontrivial, these estimates imply that firms do not fully exercise their labor market power over their workers. Furthermore, I find that the negative earnings impact of a firm's market power is strongest in the lower half of the earnings distribution, and that a one standard deviation increase in the labor supply elasticity to the firm reduces the variance of the earnings distribution by 9%.

Regulation distance, labour segmentation and gender gaps

Existing theories on human capital, labor market segmentation, and discrimination fail to fully explain gender gaps—for example, the large gender gap in elite occupations where women apparently possess high labor market power. This chapter seeks a more complete, occupation-related understanding, through the interaction between labor segmentation, regulation content, and regulation distance, the last referring to the extent to which employment of particular workers is (un)regulated. Regulation distance encompasses a continuum from “regulation proximity” to “market proximity.” The domestic sphere, the state, unions, and class relations all influence the content of regulation. Each of these also influences norms by which groups in power operate. A greater reliance on the “market” does not necessarily remove pay distortions; rather, it might increase their impact through gendered norms.

Four Pillars of Job Applicant Screening in China

Chinese employers practice extensive personal screening of job applicants. This study identifies four manifestations of this practice by motive – statistical, customer and employer taste-based, and regulatory – and evaluates their prevalence, economic determinants and implications for firms’ performance using simultaneous-equations models. Ordinary linear and Poisson regression specifications are estimated. Statistical screening is related positively to employers’ capital intensity, labor-market power and private ownership, and negatively to the supply of skills in provincial labor markets, as may be expected. Customer-taste screening is more prevalent in service and sales industries, as expected, and interestingly in wealthy first-tier cities. Employer-taste screening appears more prevalent at privately-owned firms, and surprisingly in skill-intensive industries and in first-tier cities, potentially reflecting difficulty at distinguishing it from customer-taste screening. Regulatory screening is related positively to firms’ market power, capital intensity and state ownership, as expected. Statistical and customer-taste screening is associated with higher firm profitability, particularly in skill-intensive industries and in service and sales industries, respectively, while employer-taste and regulatory screening is associated with lower profitability, as expected. These results jointly validate our identification of the four pillars of applicant screening.

MONOPSONISTIC BEHAVIOR IN CHILEAN MANUFACTURING

This paper uses a firm-specific method for measuring monopsonistic behavior developed by Brummund (2012) using data for Chilean manufacturing plants for the period 2001-2006. We find that there is significant heterogeneity in labor market power across plants and that nearly a quarter of the plants have a significant level of labor market power. It is also shown that individual plant characteristics explain more of the variation in monopsonistic behavior than do the characteristics of the accompanying labor market. These results are relevant for labor market policy since and suggest that a binding minimum wage could have ambiguous effects on welfare.

Firm Market Power and the Earnings Distribution

Using the Longitudinal Employer Household Dynamics (LEHD) data from the United States Census Bureau, I compute firm-level measures of labor market (monopsony) power. To generate these measures, I extend the dynamic model proposed by Manning (2003) and estimate the labor supply elasticity facing each private non-farm firm in the US. While a link between monopsony power and earnings has traditionally been assumed, I provide the first direct evidence of the positive relationship between a firm\'s labor supply elasticity and the earnings of its workers. I also contrast the semistructural method with the more traditional use of concentration ratios to measure a firm\'s labor market power. In addition, I provide several alternative measures of labor market power which account for potential threats to identification such as endogenous mobility. Finally, I construct a counterfactual earnings distribution which allows the effects of firm market power to vary across the earnings distribution. I estimate the average firm\'s labor supply elasticity to be 1.08, however my findings suggest there to be significant variability in the distribution of firm market power across US firms, and that dynamic monopsony models are superior to the use of concentration ratios in evaluating a firm\'s labor market power. I find that a one-unit increase in the labor supply elasticity to the firm is associated with wage gains of between 5 and 18 percent. While nontrivial, these estimates imply that firms do not fully exercise their labor market power over their workers. Furthermore, I find that the negative earnings impact of a firm\'s market power is strongest in the lower half of the earnings distribution, and that a one standard deviation increase in firms\' labor supply elasticities reduces the variance of the earnings distribution by 9 percent.

Firm Market Power and the Earnings Distribution

Using the Longitudinal Employer Household Dynamics (LEHD) data from the United States Census Bureau, I compute firm-level measures of labor market (monopsony) power. To generate these measures, I extend the dynamic model proposed by Manning (2003) and estimate the labor supply elasticity facing each private non-farm firm in the US. While a link between monopsony power and earnings has traditionally been assumed, I provide the first direct evidence of the positive relationship between a firm's labor supply elasticity and the earnings of its workers. I also contrast the semi-structural method with the more traditional use of concentration ratios to measure a firm's labor market power. In addition, I provide several alternative measures of labor market power which account for potential threats to identification such as endogenous mobility. Finally, I construct a counter-factual earnings distribution which allows the effects of firm market power to vary across the earnings distribution. I estimate the average firm's labor supply elasticity to be 1.08, however my findings suggest there to be significant variability in the distribution of firm market power across US firms, and that dynamic monopsony models are superior to the use of concentration ratios in evaluating a firm's labor market power. I find that a one-unit increase in the labor supply elasticity to the firm is associated with wage gains of between 5 and 18 percent. While nontrivial, these estimates imply that firms do not fully exercise their labor market power over their workers. Furthermore, I find that the negative earnings impact of a firm's market power is strongest in the lower half of the earnings distribution, and that a one standard deviation increase in firms' labor supply elasticities reduces the variance of the earnings distribution by 9 percent.

Labor Market Monopsony

There has been a renewed interest in monopsony in labor markets in recent years that includes both the traditional static approach to monopsony, ably reviewed by Boal and Ransom (1997), and the “new” approach to monopsony with more attention paid to dynamic issues, developed in detail by Manning (2003). The articles presented in this supplement highlight both approaches and illustrate the range of labor market settings in which the exercise of monopsony power may be important. The first use of the term “monopsony” in economics is widely attributed to Robinson (1969). Robinson conceived of monopsony as analogous to monopoly. Whereas monopoly refers to the case of a single seller confronted in a market by many buyers, monopsony refers to the case of a single buyer confronted in a market by many sellers. Just as the monopolist faces a downward-sloping demand curve for his product and

Interaction between product market and labour market power: evidence from France, Belgium and Chile

This article jointly estimates price-cost mark-ups and union bargaining power of manufacturing firms in France, Belgium and Chile. Our GMM results provide strong evidence of price-cost mark-ups being underestimated when labour market imperfections are ignored, corresponding to the omission of the part of product rents captured by the workers.

The rhetoric of the `good worker' versus the realities of employers' use and the experiences of migrant workers

The article examines the attitudes and strategies of a UK based employer as they developed their use of migrant labour in the latest manifestation of a strategy that targeted groups of vulnerable workers with lower labour market power. Management's celebration of the `good worker', based on the stereotyping of the perceived attributes of immigrant employees, resonated with the `business case' and `resource based view' debates within the human resource management literature.Yet terms and conditions of employment remained wedded to the bottom of the labour market. The article integrates analysis of the attitudes of employers with the views, experiences and aspirations of migrant workers. Micro level processes are also located in a wider analytical framework, incorporating the broader socio-economic context and key moments of regulatory intervention.

Contracting and careers: choosing between self and organizational employment

Explores worker choices to become self‐employed contractors. Adopts a qualitative method and uses data from in‐depth interviews with workers from two contrasting occupational groups. Reveals five sets of factors which appear to be central to worker decision making. Contrasts the perspectives of the workers and draws conclusions relating to the impact of skill and labor market power on the choice of employed/self‐employed status, and subsequent career prospects. Suggests that recent views of “boundaryless careers” are more relevant to highly‐skilled groups of workers, and discusses the tensions between structural forces that constrain individuals’ career autonomy and the desire of many workers to be proactive agents in the construction of their own careers. The findings suggest that a balanced examination of “new careers” should account for the complexity of a new world of work that advantages only some. Argues for greater understanding of the choice between different modes of employment rather than just occupational choice. Finally, suggests that researchers and career practitioners need to be able to weigh the advantages and disadvantages of different modes of employment from a sound knowledge base.

A Note on ITQs and Optimal Investment

This paper considers the incentives to invest under an ITQ management regime when labor is rewarded by the so-called share system. It is shown that the share system is likely to result in overinvestment under ITQs. Labor market power of crew, reflected in a high labor share of the catch, might correct for this and might even prevent excessive investment when there is competition for a total catch quota.

The Power and Collapse of Paternalism: The Ford Motor Company and Black Workers, 1937-1941

In this comparative historical analysis, I examine the significance of paternalism in two interracial labor organizing drives at the Ford Motor Company's River Rouge plant during the Great Depression. The first drive resulted in ongoing interracial antagonism among Ford workers and the union's failure. The second drive generated interracial labor solidarity and led to the union's recognition. One of the distinctive aspects of the setting was Henry Ford's paternalistic relations with the black community of Detroit. Drawing from Mary Jackman's (1994) research, I examine the dimensions of paternalism and how it contributes to split labor market dynamics, in particular, and power relationships, in general. This analysis suggests that a split labor market based on paternalism can only be overcome by workers when another political actor intervenes in ways that challenge the stratification (whether by design or not).

New Technology and Industrial Relations.

Part 1 Theoretical and methodological issues: industrial relations and technical change - the case for an extended perspective, Wolfgang Streeck and Arndt Sorge flexible specialization - miracle or myth?, Richard Hyman comparative research and new technology, Beat Hotz-Hart new technology and social networks at the local and regional level, Reinhard Lund and Jorgen Rasmussen. Part 2 Innovation initiatives: management strategy - towards new forms of regulation?, Serafino Negrelli between Fordism and flexibility?, Stephen Wood new technology in Scotbank, John MacInnes. Part 3 Skills, deskilling and labour market power: labour and monopoly capital, Peter Armstron skills, options and unions, Jon Gulowsen new technology and training, Helen Rainbird. Part 4 Trade union strategies: new technological paradigms, long waves and trade unions, Otto Jacobi technological change and unions, Greg Bamber policy debates over work reorganization in North American unions, Harry Katz the Australian metalworkers' union and industrial change, Stephen Frenkel. Part 5 Technological innovation and workplace relations: information, consultation and the control of new technologies, Robert Price consensual adaptation to new technology - observations on the Finnish case, Pertti Koistinen and Kari Lilja industrial relations and workers' representation at workplace level in France, Sabine Erbes-Seguin bargaining over new technology - a comparison of France and Germany, Michele Tallard.

Wages, concentration, and import penetration: An analysis of the interrelationships

The significant increase in imports in recent years ~ has raised a variety of questions regard. ing the abili ty of U.S. companies to compete effectively with foreign companies. One question that has emerged is whether market power in both product and labor markets has been responsible for the increased import penetration. This particular question has a sound foundat ion in the l i terature of industrial organization. With respect to product market power, both theory and a large body of evidence suggest that prices and profits are relatively high in oligopolistic, or highly concentrated, industries, i .e. , those with few producers. 2 Therefore, it seems quite reasonable to expect that producers in other countries will be attracted by the relatively high profits that characterize concentrated industries. With respect to labor market power, there is at least some individual case support for the argument that unions, by establishing some degree of monopo ly over the supply o f labor, are able to obtain wage increases higher than can be justified by product ivi ty increases. The result, o f course, is to push up product ion costs so

Review: The Limits to Capital, Segmented Labour Markets: Conspiracy or Collusion? Segmented Work, Divided Workers: The Historical Transformation of Labor in the United States, the Dynamics of Labour Market Segmentation, Power and Crisis in the City: Corporations, Unions and Urban Policy, Critical Human Geography Series. Geography and the State: An Essay in Political Geography, Conflict, Politics and the Urban Scene,

Review: The Limits to Capital, Segmented Labour Markets: Conspiracy or Collusion? Segmented Work, Divided Workers: The Historical Transformation of Labor in the United States, the Dynamics of Labour Market Segmentation, Power and Crisis in the City: Corporations, Unions and Urban Policy, Critical Human Geography Series. Geography and the State: An Essay in Political Geography, Conflict, Politics and the Urban Scene,