Leadership

Temporary Contracts And Monopsony Power In The UK Labour Market

Free registration required

Executive Summary

This paper addresses the applicability of the theory of equalizing differences (Rosen, 1987) in a market in which temporary and permanent workers co-exist. The assumption of perfect competition in the labour market is directly questioned and a model is developed in which the labour market is described as a duopsony and the relation between wage and non-monetary job characteristics is studied for workers with different contract lengths. The empirical analysis, based on several waves of the UK Labour Force Data, confirms several of the hypotheses suggested by the model and emphasizes how in the short run workers who have experienced a change in their employer can expect a career trajectory in line with the theory on compensating differentials.

  • Format: PDF
  • Size: 676.86 KB