Full Citation

Title: Monopsony Power and Guest Worker Programs

Citation Type: Journal Article

Publication Year: 2019

ISBN:

ISSN: 0003-603X

DOI: 10.1177/0003603X19875040

NSFID:

PMCID:

PMID:

Abstract: Guest workers on visas in the United States may be unable to quit bad employers due to barriers to mobility and a lack of labor market competition. Using H-1B, H-2A, and H-2B program data, we calculate the concentration of employers in geographically defined labor markets within occupations. We find that many guest workers face moderately or highly concentrated labor markets, based on federal merger scrutiny guidelines, and that concentration generally decreases wages. For example, moving from a market with a Herfindahl-Hirschman Index of zero to a market comprised of two employers lowers H-1B worker wages approximately 10%, and a pure monopsony (one employer) reduces wages by 13%. A simulation shows that wages under pure monopsony could be 47% lower, suggesting that employers do not use the full extent of their monopsony power. Enforcing wage regulations and decreasing barriers to mobility may better address issues of exploitation than antitrust scrutiny alone.

Url: http://journals.sagepub.com/doi/10.1177/0003603X19875040

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Authors: Gibbons, Eric M.; Greenman, Allie; Norlander, Peter; Sørensen, Todd

Periodical (Full): The Antitrust Bulletin

Issue: 4

Volume: 64

Pages: 540-565

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure, Migration and Immigration

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