Traditional models of the labor market typically assume that wages are set by the market, not the firm. However, over the last 15 years, a growing body of empirical research has provided evidence against this assumption. Recent studies suggest that a monopsonistic model, where individual firms...

When jobs offered by different employers are not perfect substitutes in the minds of workers, employers gain wage-setting power; the extent of this power can be captured by the elasticity of labor supply that each employer faces. Estimates of this parameter reported by the literature vary...

Recent empirical work has found evidence that the elasticity of labor supply to individual firms is finite, implying that firms may have wage setting power. However, these studies capture only single snapshots of the elasticity. We are the first to study how the elasticity of labor supply to the...