Code for: "Monopsony in the U.S. Labor Market"

This paper quantifies employer market power in U.S. manufacturing and how it has changed over time. Using administrative data,
we estimate plant-level markdowns—the ratio between a plant’s
marginal revenue product of labor and its wage. We find most
manufacturing plants operate in a monopsonistic environment,
with an average markdown of 1.53, implying a worker earning
only 65 cents on the marginal dollar generated. To investigate
long-term trends for the entire sector, we propose a novel, theoretically grounded measure for the aggregate markdown. We find
that it decreased between the late 1970s and the early 2000s, but
has been sharply increasing since.