Labor Monopsony and the Limits of the Law

My latest paper on the law and policy implications of labor monopsony strikes a more pessimistic note than earlier work. I argue (with Suresh Naidu) that in the best case, antitrust law can only make a dent in the labor monopsony problem. Other legal and policy approaches are needed, and we discuss some of them. Here is the abstract:

Recent literature has suggested that antitrust regulation is an appropriate response to labor market monopsony. This article qualifies the primacy of antitrust by arguing that a significant degree of labor market power is “frictional,” that is, without artificial barriers to entry or excessive concentration of employment. If monopsony is pervasive under conditions of laissez-faire, antitrust is likely to play only a partial role in remedying it, and other legal and policy instruments to intervene in the labor market will be required.