Abstract
This paper measures the degree of monopsony power in the US higher-education labor market by using school-specific labor demand instruments to directly estimate the residual labor supply curves facing individual universities. The results indicate that schools have significant monopsony power over tenure-track faculty but face perfectly elastic residual labor supply curves for non-tenure-track faculty. There is some evidence for three sources of monopsony power often discussed in the literature—employer concentration, search frictions/job-switching costs, and differentiated jobs. The results also suggest that monopsony over tenure-track faculty may have contributed to the trend toward hiring more non-tenure-track faculty.