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Researchers’ interest in monopsony has increased in recent years. This article reviews the accumulating evidence that employers have considerable monopsony power. It summarizes the application of this idea to explaining the impact of minimum wages and immigration, in anti-trust, and in understanding how to model the determinants of earnings in matched employer–employee data sets and the implications for inequality and the labor share.

To generate big responses of unemployment to productivity changes, researchers have reconfigured matching models in various ways: by elevating the utility of leisure, by making wages sticky, by assuming alternating-offer wage bargaining, by introducing costly acquisition of credit, by assuming fixed matching costs, or by positing government-mandated unemployment compensation and layoff costs. All of these redesigned matching models increase responses of unemployment to movements in productivity by diminishing the fundamental surplus fraction, an upper bound on the fraction of a job’s output that the invisible hand can allocate to vacancy creation. Business cycles and welfare state dynamics of an entire class of reconfigured matching models all operate through this common channel.

Recent literature analysing wage effects of immigration assumes labour supply is fixed across education-experience cells. This article departs from this assumption estimating a labour market equilibrium dynamic discrete choice model on U.S. micro-data for 1967–2007. Individuals adjust to immigration by changing education, participation, and/or occupation. Adjustments are heterogeneous: 4.2–26.2% of prime-aged native males change their careers; of them, some switch to white-collar careers and increase education by about three years; others reduce labour market attachment and reduce education also by about three years. These adjustments mitigate initial effects on wages and inequality. Natives that are more similar to immigrants are the most affected on impact, but also have a larger margin to adjust and differentiate. Adjustments also produce a self-selection bias in the estimation of wage effects at the lower tail of the distribution, which the model corrects.

We develop and analyze a labor market model in which heterogeneous firms operate under decreasing returns and compete for labor by posting long-term contracts. Firms achieve faster growth by offering higher lifetime wages, which allows them to fill vacancies with higher probability, consistent with recent empirical findings. The model also captures several other regularities about firm size, job flows, and pay, and generates sluggish aggregate dynamics of labor market variables. In contrast to existing bargaining models with large firms, efficiency obtains and the model allows a tractable characterization over the business cycle.

The first truly global history of work, an upbeat assessment from the age of the hunter-gatherer to the present day We work because we have to, but also because we like it: from hunting-gathering over 700,000 years ago to the present era of zoom meetings, humans have always worked to make the world around them serve their needs. Jan Lucassen provides an inclusive history of humanity's busy labor throughout the ages. Spanning China, India, Africa, the Americas, and Europe, Lucassen looks at the ways in which humanity organizes work: in the household, the tribe, the city, and the state. He examines how labor is split between men, women, and children; the watershed moment of the invention of money; the collective action of workers; and at the impact of migration, slavery, and the idea of leisure. From peasant farmers in the first agrarian societies to the precarious existence of today's gig workers, this surprising account of both cooperation and subordination at work throws essential light on the opportunities we face today.

We assess the empirical content of equilibrium models of labor market sorting based on unobserved (to economists) characteristics. In particular, we show theoretically that all parameters of the classic model of sorting based on absolute advantage in Becker (1973) with search frictions can be nonparametrically identified using only matched employer-employee data on wages and labor market transitions. In particular, these data are sufficient to nonparametrically estimate the output of any individual worker with any given firm. Our identification proof is constructive and we provide computational algorithms that implement our identification strategy given the limitations of the available data sets. Finally, we add on-the-job search to the model, extend the identification strategy, and apply it to a large German matched employer-employee data set to describe detailed patterns of sorting and properties of the production function.

Two recent papers, Deaton (2009) and Heckman and Urzua (2009), argue against what they see as an excessive and inappropriate use of experimental and quasi-experimental methods in empirical work in economics in the last decade. They specifically question the increased use of instrumental variables and natural experiments in labor economics and of randomized experiments in development economics. In these comments, I will make the case that this move toward shoring up the internal validity of estimates, and toward clarifying the description of the population these estimates are relevant for, has been important and beneficial in increasing the credibility of empirical work in economics. I also address some other concerns raised by the Deaton and Heckman—Urzua papers.

Der Nobelpreis für Wirtschaftswissenschaften geht 2021 an David Card für seine empirischen Beiträge zur Arbeitsökonomik sowie an Joshua Angrist und Guido Imbens für ihre methodischen Beiträge zur Analyse kausaler Zusammenhänge. Die Analyse kausaler Zusammenhänge in der empirischen Ökonomik wurde durch die von den Preisträgern maßgeblich vorangetriebene Methodik der natürlichen Experimente revolutioniert. Anhand der Wirkung von Mindestlöhnen, Mitbestimmung und der Arbeitslosenversicherung lässt sich illustrieren, wie durch natürliche Experimente neue wissenschaftliche Einsichten erlangt werden, die eine empirische Grundlage für eine evidenzbasierte Politikberatung bilden können. This year's Nobel Prize in Economics honoured David Card of the University of California, Berkeley \"for his empirical contributions to labour economics\", and Joshua Angrist of MIT and Guido Imbens of Stanford University \"for their methodological contributions to the analysis of causal relationships\". We explain how the laureates revolutionised the analysis of causal relationships in empirical economics through the methodology of natural experiments. Three examples from the German labour market on the effects of minimum wages, code-termination and unemployment insurance illustrate how natural experiments yield new insights, which can form the foundation for evidence-based policy advice.

The aim of this paper is to identify the microeconomic determinants of underemployment and unemployment in Ecuador before and after COVID-19. A multinomial logit model was estimated on the accumulated data from the National Employment, Unemployment and Underemployment Survey (ENEMDU) for 2019 and 2022. The results show that the average worker has a 59% probability of being in an adequate job, 35% of being underemployed and 6% of being unemployed. These probabilities change significantly depending on the worker's education and experience. In addition, significant differences were evident by gender, ethnicity, role in the home, and marital status. These differences increased after COVID-19. Thus, underemployment and unemployment promote labor inequality in Ecuador. Based on the results, the public policy should be aimed at reducing economic and opportunity inequalities because vulnerable groups were identified in the labor market.