Employer monopsony power over workers is considerably weaker when workers live in populated areas.

Judge as of 2019-07-18 against the empirical labour-economics literature. True: studies broadly find that employer concentration and wage-setting (monopsony) power are markedly lower in large or dense labour markets than in rural or sparse ones (e.g. concentration indices or labour-supply elasticities facing firms that vary clearly with market size). Mostly true: the evidence supports the direction but the size of the difference is modest or varies by industry. Mixed: the findings are inconsistent, or some forms of monopsony (e.g. from search frictions) persist about as much in cities. Mostly false: the evidence shows only a weak link, so 'considerably weakened' overstates it. False: the evidence shows monopsony power is not lower, or is higher, in populated areas.

Set before the research began.

1. E1 The Urban Wage Premium in Imperfect Labor Markets Journal of Human Resources (LSE Research Online repository copy) · 2020

   “We show that employers possess less wage-setting power in denser markets.”

2. E2 Monopsony in the Labor Market: New Empirical Results and New Public Policies - International Economics Section Princeton University, International Economics Section (Industrial Relations Section Working Paper) · October 2021

   “They then show that around 40% of the effect of population on mean wages in Germany is explained by the higher labor supply elasticities in larger labor markets.”

3. E3 Monopolies Are Not Taking a Fifth of Your Wages Information Technology and Innovation Foundation (ITIF) · 2 May 2022

   “they found an HHI of only 1,691—about half as large as the unweighted HHI—reflecting that larger cities tend to have less-concentrated labor markets.”

4. E4 Monopolies Are Not Taking a Fifth of Your Wages Information Technology and Innovation Foundation (ITIF) · 2 May 2022

   “Notably, monopsony power does not appear to have much impact on nurses’ wages.”

E1, a peer-reviewed study, finds that employers have less wage-setting power in denser labour markets, and E3 reports that labour-market concentration is lower in larger cities. E2 says higher labour-supply elasticities in larger markets explain about 40% of the effect of population on wages in Germany. That is a real effect, but it accounts for only part of the urban wage gap, so the evidence supports the direction without clearly showing a "considerable" difference. E4 adds that monopsony power does not appear to have much impact on nurses' wages, which suggests the effect may vary by occupation. Most of these sources postdate the 2019 judgment date.