Colluding Against Workers

Department of Economics and Decision Sciences

Speaker : Michael Rubens (UCLA)

Room T-042

Abstract :

Empirical models of labor market competition usually assume that employers set wages non-cooperatively, despite ample evidence of collusive wage-setting agreements. We propose an identification approach for labor market collusion that relies on production and cost data, and use it to study how employer collusion affected wage markdowns of 227 Belgian coal firms between 1845 and 1913. We are able to detect collusion through the 1897 coal cartel, an observable shock to collusion, without ex-ante knowledge of its timing, and find that it explains the fast growth in markdowns after 1900.

Joint work with Vincent Delabastita (Radboud Univ.)