KINKED SUPPLY CURVES AND THE LABOUR MARKET

Abstract

This paper seeks to explain various aspects of labour market activity under oligopsonistic conditions by means of a kinked labour supply curve, the development of which appears to have been neglected in the literature. The ideas for this approach arose out of an ongoing empirical study of a large local labour market during which it became apparent that an extension of the case stated by Bronfenbrenner (1940) could be used to account for a wide range of observed behaviour. It is apparent that dominant employers can dictate conditions in the market even in situations where their concentration of employment is as low as 15–30% of total employment, and at this level one would expect the incidence and effect of oligopsony to be significant within the economy as a whole. Major labour market studies in the U.K. (MacKay et al 1971) and the U.S.A. (Rees and Shultz, 1970) have tended to ignore the consequences of employer interdependence, basically because they were centred on large conurbations. This is an area that may fruitfully be more extensively explored.

Citation

COYNE, J. (1975), "KINKED SUPPLY CURVES AND THE LABOUR MARKET", Journal of Economic Studies, Vol. 2 No. 2, pp. 139-151. https://doi.org/10.1108/eb008055