Applied Seminar - Francesco Amodio (McGill)
| Dates: | 1 March 2023 |
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| Times: | 13:00 - 14:00 |
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| What is it: | Seminar |
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| Organiser: | School of Social Sciences |
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| Who is it for: | University staff, Current University students |
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Title: Labor Market Power, Self-employment, and Development
Abstract:
We use data on firms and workers in Peru and a general equilibrium model to investigate the extent, determinants and consequences of labor market power in lower-income countries. Empirically, we document that high levels of concentration among employers coexist with large shares of self-employment across manufacturing local labor markets, with workers sorting and switching frequently between wage work and self-employment. These features shape labor market power by affecting two key margins: (1) the oligopsony power of firms in the labor market and (2) the labor supply elasticity through worker selection into wage work. Although concentration increases oligopsony power, the prevalence of self-employment increases the wage work supply elasticity in highly-concentrated markets, thus reducing the wage-setting power of firms. Counterfactual exercises nevertheless show that wage employment and wages would increase by 11 percentage points and 30%, respectively, if labor markets were perfectly competitive, and that labor market power and the availability of self-employment mitigate the effects of industrial development policies.
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Boardroom, 2.016/2.017
Arthur Lewis Building
Manchester
