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Christiana Ellen Hilmer and Michael John Hilmer
''Do Local Amenities Increase Monopsony Power?''
( 2019, Vol. 39 No.4 )
We ask whether workers in high amenity locations are willing to cede greater degrees of monopsony power to their employers in exchange for the ability to remain in their more desirable locales. Our hypothesis is that negative returns to seniority should be greater for workers in higher amenity locations than for otherwise similar workers in lower amenity locations. Empirical evidence from a sample of public Ph.D. programs is consistent with this prediction. Using property values as well as number of pleasant days as a proxy for local amenities we find that the estimated negative returns to seniority are between 1.3 and 4.1 percent larger for higher property values locations and the negative returns to seniority are between 1.3 and 5.3 percent larger for locations with more pleasant days, all else equal.
Keywords: Monopsony Power; Public-sector pay; Local Amenities
JEL: J3 - Wages, Compensation, and Labor Costs: General
I2 - Education: General
Manuscript Received : Apr 30 2019 Manuscript Accepted : Nov 03 2019

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