CEP/STICERD Applications Seminars
Bidding for Talent: A Test of Conduct on a High-Wage Labor Market
Nina Roussille (Massachusetts Institute of Technology)
Monday 05 June 2023 12:00 - 13:30
SAL 1.04, 1st Floor Conference Room, Sir Arthur Lewis Building, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH
About this event
This paper proposes a novel procedure for adjudicating between models of firm wage-setting conduct. Using data from a U.S. job search platform, we first flexibly estimate labor supply to differentiated firms. We then use those estimates to formulate a test of conduct based on exclusion restrictions. On average, workers are willing to pay 12.5% of their salary to enjoy a 1-S.D. improvement in non-wage amenities. Between-worker dispersion in preferences is of a similar magnitude, indicating that preferences are not well-described by a single ranking of firms. Oligopsonistic models incorporating strategic interactions between firms and tailoring of wage offers to workers' outside options are rejected in favor of simpler monopsonistic models featuring near-uniform markdowns. Misspecification has meaningful consequences: while our preferred model predicts average markdowns of 18%, others predict average markdowns of 26% (about 50% larger). Implied patterns of between- and within-firm productivity dispersion also differ markedly across models of conduct.
Participants are expected to adhere to the CEP Events Code of Conduct.
This event will take place in SAL 1.04, 1st Floor Conference Room, Sir Arthur Lewis Building, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH.The building is labelled SAL on the LSE campus map. You can also find us on Google Maps. For further information, go to contact us.
This series is part of the CEP's Labour Markets programme.