Research
Research
Dynamic Oligopsony: Ensuring Future Labor Supply and its Effect on Wages (with Annaig Morin)
Description: Recent papers have found that labor markets are concentrated and workers are relatively inelastic to wages indicating that firms should have substantial monopsony power in the labor market, at least in the short run. In this paper, we consider how long run considerations of worker entry and exit into and out of the labor pool affect a firm's ability to exercise monopsony power. In particular, firms face a tradeoff: they can exploit their current stock of workers by setting wages low, but in so doing they discourage entrants, which shrinks their future labor pool. Thus, when firms internalize the effect that their wages have on the future labor supply, they will set wages higher than would a firm that ignores this effect. Studying monopsony power with a fixed labor pool would lead to overestimates of monopsony power. We also find that incentives to raise wages to attract entrants are attenuated with more competition since the labor pool is a shared resource among firms.
Collective Bargaining and Oligopsony: Evidence from K-12 Pennsylvania Teachers (with Allan Collard-Wexler and Matthew Weinberg)
Abstract: Employers facing limited labor market competition may suppress wages below socially optimal levels. Unions can counteract this wage suppression through collective bargaining, though they may also push wages above the socially optimal level. To assess these forces, we estimate a structural model of labor supply, labor demand, and Nash-in-Nash bargaining over wages between teacher unions and school districts in Pennsylvania's K-12 public school system from 2013 to 2020. Using the estimated parameters, we compare negotiated equilibrium wages and employment to the pure oligopsony scenario and the social planner scenario. On average, pure oligopsony reduces wages 8 percent below the social optimum, while collective bargaining raises wages by 7 percent above the optimum. This average masks substantial district-level heterogeneity driven by variation in bargaining power. Thirty percent of schools have negotiated salaries below the social optimum due to cross-district externalities, where high salaries in one district reduce hiring and thereby increase labor supply in competing districts.
The Effect of Non-competes on Firm Productivity (with Matthew Johnson, Kurt Lavetti, Michael Lipsitz, Devesh Raval)
Angerhofer, Tirza (2024). "Mergers in Declining Industries." Review of Industrial Organization, 65: 255-267.
Angerhofer, Tirza, Roger D Blair and Christine Piette Durrance (2022). "Monopoly and Monopsony in Healthcare Markets.'' Cambridge University Press.
Angerhofer, Tirza and Roger D. Blair (2021). "Considerations of Buyer Power in Merger Review," Journal of Antitrust Enforcement, 10: 260-278.
Angerhofer, Tirza and Roger D. Blair (2021). "Apple's Mounting App Store Woes," Antitrust Law Journal, 35.
Angerhofer, Tirza and Roger D. Blair (2021). "Successive Monopoly, Bilateral Monopoly and Vertical Mergers'' Review of Industrial Organization, 59: 343-361.
Angerhofer, Tirza and Roger D. Blair (2021). ``Economic Reality at the Core of Apple," Antitrust Bulletin Onlinefirst: 1-14.
Angerhofer, Tirza and Roger D. Blair (2021). "Monopoly and Monopsony: Antitrust Injury, Standing, and Damages,'' University of Cincinnati Law Review, 89: 256-285.
Angerhofer, Tirza and Roger D. Blair (2020). "Collusion in the Labor Market: Intended and Unintended Consequences," CPI: Antitrust Chronicle, May II.