Monopsonistic Behavior in the chilean Manufacturing

MACKINSON, DAVID; NAVARRO, LUCAS

Revista de Analisis Economico

Universidad Alberto Hurtado

Lugar: Santiago de Chile; Año: 2013 vol. 28 p. 91 - 91

0716-5927

his paper uses a firm-specific method for measuring monopsonistic behaviordeveloped by Brummund (2012) using data for Chilean manufacturing plantsfor the period 2001-2006. We find that there is significant heterogeneity inlabor market power across plants and that nearly a quarter of the plants havea significant level of labor market power. It is also shown that individual plantcharacteristics explain more of the variation in monopsonistic behavior thando the characteristics of the accompanying labor market. These results arerelevant for labor market policy since and suggest that a binding minimumwage could have ambiguous effects on welfare