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Labor Market Concentration

Author

Listed:
  • José Azar
  • Ioana Marinescu
  • Marshall Steinbaum

Abstract

A product market is concentrated when a few firms dominate the market. Similarly, a labor market is concentrated when a few firms dominate hiring in the market. Using data from the leading employment website CareerBuilder.com, we calculate labor market concentration for more than 8,000 geographic–occupational labor markets in the United States. Based on the Department of Justice–Federal Trade Commission horizontal merger guidelines, the average market is highly concentrated. Going from the 25th percentile to the 75th percentile in concentration is associated with a 5 percent (OLS) to 17 percent (IV) decline in posted wages, suggesting that concentration increases labor market power.

Suggested Citation

  • José Azar & Ioana Marinescu & Marshall Steinbaum, 2022. "Labor Market Concentration," Journal of Human Resources, University of Wisconsin Press, vol. 57(S), pages 167-199.
  • Handle: RePEc:uwp:jhriss:v:57:y:2022:i:s:p:s167-s199
    Note: DOI: 10.3368/jhr.monopsony.1218-9914R1
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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