Exploitation of labor? Classical monopsony power and labor's share

• 成果类型: Article
• 署名作者: Brooks, Wyatt J.; Kaboski, Joseph P.; Li, Yao Amber; Qian, Wei
• 署名单位: Arizona State University; Arizona State University-Tempe; University of Notre Dame; National Bureau of Economic Research; Hong Kong University of Science & Technology; Shanghai University of Finance & Economics
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2021.102627
• 发表日期: 2021
• 关键词: manufacturing; Aggregate labor's share; market power; Monopsony power; CHINA; INDIA

摘要

How important is the exercise of classical monopsony power against labor for the level of wages and labor's share? We examine this in the context of China and India - two large, rapidly-growing developing economies. Using theory, we develop a novel method to quantify how wages are affected by the exertion of market power in labor markets. The theory guides the measurement of labor markdowns, i.e., the gap between wage and the value of the marginal product of labor, and the method examines how they comove with local labor market share. Applying this method, we find that market power substantially lowers labor's share of income: by up to 11 percentage points in China and 13 percentage points in India. This impact has fallen over time in both countries, however.