Abstract: Download This Paper Open PDF in Browser Add Paper to My Library Share: Permalink Using these links will ensure access to this page indefinitely Copy URL Global Labor Market Power IZA Discussion Paper No. 16823 46 Pages Posted: 26 Feb 2024 See all articles by Francesco AmodioFrancesco AmodioMcGill UniversityEmanuele BrancatiSapienza University of Rome; IZA Institute of Labor Economics; Sapienza University of Rome - Faculty of EconomicsPeter BrummundUniversity of Alabama - Department of Economics, Finance and Legal StudiesNicolás de RouxUniversidad de los Andes - Department of EconomicsMichele Di MaioSapienza University of Rome Abstract We estimate the labor market power of over 13,000 manufacturing establishments across 82 low and middle-income countries around the world. Within local labor markets, larger and more productive firms have higher wage markdowns and pay lower wages. Labor market power across countries exhibits a mild non-linear relationship with GDP per capita, entirely driven by a strong hump-shaped relationship with the share of self-employed workers. Labor market institutions fully account for the hump shape: in countries with unemployment protection, wage markdowns increase with the share of self-employment while the opposite is true in countries without it. We explain this finding through the lens of a simple oligopsonistic labor market model with frictions. Self-employment prevalence correlates with the elasticity of labor supply to the wage paid, and labor market institutions can change the sign of this relationship. Keywords: labor market power, self-employment, development, labor market institutions JEL Classification: J20, J30, J42, L11 Suggested Citation: Suggested Citation Amodio, Francesco and Brancati, Emanuele and Brummund, Peter and de Roux, Nicolás and Di Maio, Michele, Global Labor Market Power. IZA Discussion Paper No. 16823, Available at SSRN: https://ssrn.com/abstract=4737333 Francesco Amodio (Contact Author) McGill University ( email ) 1001 Sherbrooke St. WMontreal, Quebec H3A 1G5Canada Emanuele Brancati Sapienza University of Rome ( email ) via Castro del Laurenziano 9Roma, IA Rome 00191Italy IZA Institute of Labor Economics ( email ) P.O. Box 7240Bonn, D-53072Germany Sapienza University of Rome - Faculty of Economics ( email ) Via del Castro Laurenziano 9Rome, 00161Italy Peter Brummund University of Alabama - Department of Economics, Finance and Legal Studies ( email ) P.O. Box 870244Tuscaloosa, AL 35487United States Nicolás De Roux Universidad de los Andes - Department of Economics ( email ) Carrera 1a No. 18A-10Bogota, AA4976Colombia Michele Di Maio Sapienza University of Rome ( email ) via del Castro Laurenziano 9RomeItaly HOME PAGE: http://https://sites.google.com/a/uniroma1.it/micheledimaio/home Download This Paper Open PDF in Browser Do you have negative results from your research you’d like to share? Submit Negative Results Paper statistics Downloads 0 Abstract Views 17 34 References PlumX Metrics Related eJournals IZA Institute of Labor Economics Discussion Paper Series Follow IZA Institute of Labor Economics Discussion Paper Series Subscribe to this free journal for more curated articles on this topic FOLLOWERS 7,219 PAPERS 16,340 This Journal is curated by: Klaus F. Zimmermann at Global Labor Organization (GLO), Marco Caliendo at University of Potsdam Feedback Feedback to SSRN Feedback (required) Email (required) Submit If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.