Working paper

Sectoral bargaining and spillovers in monopsonistic labour markets

Ihsaan Bassier
November 2020

I study wage increases negotiated by sectoral bargaining councils in South Africa using the tax panel data from 2008 to 2018. By isolating all large contracted wage increases in a stacked event-study design, I investigate its impact on wages and employment flows for contractually bound firms as well as for non-bound firms that compete over the same labour pool. These direct and spillover firm-level responses shed light on the interplay between institutional regulation, monopsony and firm-level heterogeneity in labour markets.