Can the Salop (1979) model also be applied to labor markets or is there any reason why it should not be?

  • 2
    $\begingroup$ Please provide a working link and a complete reference (because links tend to stop working). Also, the paper is from 1979 so a forward search on who has cited this paper in labor economics may provide you the best answer (the best way of showing that it can be applied to labor markets is probably doing it and given the age of the paper most likely someone will have if it was a good idea). $\endgroup$ Dec 13, 2021 at 20:27
  • $\begingroup$ Edited the link. Forward searching references with 4500 citations is a bit difficult, I searched for it independently though. $\endgroup$
    – Papayapap
    Dec 13, 2021 at 20:30
  • $\begingroup$ ok, well a search of Journal of Labor Economics on key word Salop 1979 results in this paper: Staiger et. al (2010) 'Is There Monopsony in the Labor Market? Evidence from a Natural Experiment' they say 'our empirical analysis is explicitly motivated by a model of geographic differentiation among firms, similar to Salop (1979)'. $\endgroup$ Dec 13, 2021 at 20:54

1 Answer 1


I have provided one reference where Salop (1979) is applied to labor markets:

Staiger et. al (2010) 'Is There Monopsony in the Labor Market? Evidence from a Natural Experiment' Journal of Labor Economics.

You will find another application in section 3 - on matching - of the article

Puga (2004) Micro-foundations of urban agglomeration economies.

The basic motivation for the application of the Salop 1979 model is in this case the assumption of a skill-space. Labor is heterogeneous and different companies are more productive when hiring labor that matches their needs in skill space.


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