Data and Code for "Exploiting or Augmenting Labor?'

We show that existing ‘production approaches’ to markdown estimation do not
separately identify factor price markdowns from factor-augmenting productivity
levels. We propose a method to overcome this challenge and apply it to study
the effects of ownership liberalization in Chinese nonferrous metal industries. We
find that private firms have much higher labor-augmenting productivity levels than
state-owned enterprises (SOEs). However, we also find that private firms exert
higher monopsony power over their workers than SOEs, although this only holds
for domestically-owned firms. This suggests that privatization policies imply a
trade-off between increased productivity and monopsony power.