Monopsony in Health Labor Markets

In recent years there has been a surge in interest in models of imperfect competition in the labor market, and monopsony in particular. Although economists have long been skeptical that employers have market power in the typical labor market, high reported vacancies for nursing positions have fueled speculation that health labor markets may be an exception at least since the writings of Donald Yett in the late-1960s. Early waves of research focused on the idea that large employers, like a hospital, could effectively monopolize employment opportunities for health workers (e.g., nurses) and depress wages. Newer work has focused on other more mundane sources of monopsony, and produced a wealth of interesting results that have challenged conventional thinking on the functioning of labor markets.