Employer branding and monopsony power in the labour market: a vignette experiment

Abstract Many firms engage in marketing efforts to improve their image as an employer (employer branding [EB]). This article re-conceptualises EB as an instrument used by firms to increase their monopsonistic power (Robinson, 1933), that is, the power of firms to set wages below the level that would be expected in a competitive labour market. To test this hypothesis, we perform a vignette experiment using original data collected via Amazon Mechanical Turk in which we randomly vary wage offers at employer-branded and not-branded firms. Our results indicate that employer-branded firms possess more monopsonistic power, particularly over male workers. We conclude by arguing that the wage-setting power of firms not only arises from illegal practices and clear aberrations of the economic system—as is the dominant discourse—but also from certain legal and widely accepted business practices.