Monopsony Power in Occupational Labor Markets

We collect data from the 1979 National Longitudinal Survey of Youth and create comparable measures of monopsonistic power for up to 46 occupational labor markets in the USA, starting in 1979 and ending in 2000. Our results suggest most occupational labor markets during that period were characterized by substantial amounts of monopsonistic, wage-setting power. Furthermore, after controlling for individual, time, and industry fixed effects, our results show a negative and significant correlation between the extent of monopsony power that characterizes a market and both, the wages and fringe benefits received by workers.