March 27, 2023
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Posted by NCID
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Alan Manning, professor of economics at the London School of Economics, visited NCID to give a seminar entitled “The wage elasticity of recruitment.” The speaker explained that most economists think of labor markets as very competitive and that it’s very easy for workers to find another job if their employer treats them badly. It is believed that this competition protects workers against exploitation by employers.

According to Manning, it is not that simple: “Most of us don’t experience labor markets like that, finding jobs, getting jobs, losing jobs, these are big deals for us. My research is about how much in market power employers have over their workers as a result of these difficulties people have in finding getting keeping jobs”.

Specifically, this research focuses on how much employers find it easier to recruit workers if they pay higher wages. The professor confirmed that “what we find is that if they raise wages by 10 percent, then the number of recruits that they get goes up by 20 percent”.