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New Market Power Models and Sex Differences in Pay

Michael R Ransom and Ronald L. Oaxaca
Journal of Labor Economics
Vol. 28, No. 2, Modern Models of Monopsony in Labor Markets: Tests and Estimates. Papers from a Conference Held in Sundance, Utah, November 2008, Organized by Orley Ashenfelter, Henry Farber, and Michael Ransom. Alan Manning, Editor. Sponsored by Industrial Relations Section, Princeton University (April 2010), pp. 267-289
DOI: 10.1086/651245
Stable URL: http://www.jstor.org/stable/10.1086/651245
Page Count: 23
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New Market Power Models and Sex Differences in Pay
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Abstract

In the context of certain models, it is possible to infer the elasticity of labor supply to the firm from the elasticity of the quit rate with respect to the wage. We use this strategy to estimate the elasticity of labor supply for men and women workers at a chain of grocery stores, identifying separation elasticities from differences in wages and separation rates across different job titles within the firm. We estimate that women have lower elasticities, so a Robinson‐style monopsony model can explain reasonably well the lower relative pay of women in the retail grocery industry.

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