Moynihan Institute of Global Affairs
Trade, Development and Political Economy
Professor, Department of Economics
University of California, Irvine
Monopsonistic Labor Markets and International Trade
This project studies the impact of trade on wage inequality and welfare when the labor market is monopsonistic. Firm heterogeneity in productivity along with workers’ idiosyncratic preferences for different firms generate between-firm wage inequality for workers with identical skills. If monopsony power is high, inequality increases monotonically with trade liberalization. The model features a novel welfare channel of workers’ “love of firm variety.” Trade liberalization provides additional welfare gains through the firm-variety channel when monopsony power is high but detracts from welfare gains when monopsony power is low.
Priyaranjan Jha is a Professor of Economics at the University of California, Irvine. He did a B.A. in Economics from St. Stephen’s College, Delhi, an M.A. in Economics from the Delhi School of Economics, and a Ph.D. in Economics from Columbia University. His areas of research are International Trade, and Economic Growth and Development. He has published a large number of papers in peer reviewed journals such as the Economic Journal, the Journal of International Economics, the Journal of Development Economics, the European Economic Review, the Journal of Applied Econometrics, and the World Economy. He has also served on the board of editors of several journals. Currently he serves as a co-editor of the Indian Growth and Development Review and an associate editor of the Journal of Development Economics. He also writes in the popular media in outlets such as the Economic Times and the Indian Express.
This event was first published on September 14, 2021 and last updated on September 20, 2021.