Giuseppe Molinari (University of Modena and Reggio Emilia)
Michele Cantarella and Chiara Strozzi
We examine monopsony power and its relationship with occupational exposure to artificial intelligence across a sample of 13 European countries from 2011 to 2020. Monopsony power is measured through the wage elasticity of labor supply, which declined during this period, indicating a rise in firms' monopsony power. This trend appears independent of professions' exposure levels to artificial intelligence, which showed only limited effects on labor supply elasticity during the observed timeframe. These findings remain consistent when analyzed across wage and educational terciles, although the results become slightly more ambiguous. Nevertheless, the analysis clearly demonstrates that the lowest wage tercile experiences greater monopsony power compared to the highest wage group, which in turn faces stronger monopsony power than the medium-wage group.