TESTING FOR EMPLOYER MONOPSONY IN TURN-OF-THE-CENTURY COAL-MINING

Isolated company towns are often cited as likely examples of labor mon opsony. This article tests for monopsony power by estimating inverse l abor supply elasticities using a county-level panel dataset on nonunio n West Virginia coal mining from 1897 to 1932. The model specification incorporates dynamics in such a way that an estimate of the gap betwe en marginal revenue product and the wage can easily be computed as a w eighted average of short- and long-run inverse elasticities. Modest es timated short-run inverse elasticities and very small long-run inverse elasticities imply that coal operators enjoyed little, if any, monops ony power over their workers.