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Concentration and mergers: evidence from Italian labor markets

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  • Filippo Passerini

Abstract

This article investigates the effects of labor market concentration on employment, job security, and wages. By constructing a flow-based index, I find that concentration is generally low across markets but varies across industries. Then, I use a Two-Stage Least Squares (TSLS) strategy based on the different exposures of industries to horizontal mergers. I find that mergers increase concentration, which in turn reduces wages by −0.14 and −0.07 and hires by −0.77 and −0.68%age points. I also find that (1) concentration does not affect the likelihood of a permanent hire but increases the probability that, when a temporary worker is renewed, the contract is again temporary; (2) men are affected by concentration only through wages, while women are less affected but also through job security; (3) estimates magnitude increases in concentration levels.

Suggested Citation

  • Filippo Passerini, 2025. "Concentration and mergers: evidence from Italian labor markets," Oxford Economic Papers, Oxford University Press, vol. 77(3), pages 790-805.
    • Handle: RePEc:oup:oxecpp:v:77:y:2025:i:3:p:790-805.
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    File URL: http://hdl.handle.net/10.1093/oep/gpae050
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    JEL classification:

    • 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
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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