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Labor-Market Concentration and Labor Compensation

Author

Listed:
  • Yue Qiu
  • Aaron Sojourner

Abstract

This article estimates the effect of labor-market concentration on labor compensation across the US private sector since 2000. The authors distinguish between concentration in local labor markets and local product markets while guarding against bias from confounded product-market concentration. The analysis extends beyond wages to rates of employment-based health insurance coverage. Reported results suggest negative effects of labor-market concentration on labor compensation. These effects are exacerbated when product-market concentration is higher or when workers are older.

Suggested Citation

  • Yue Qiu & Aaron Sojourner, 2023. "Labor-Market Concentration and Labor Compensation," ILR Review, Cornell University, ILR School, vol. 76(3), pages 475-503, May.
    • Handle: RePEc:sae:ilrrev:v:76:y:2023:i:3:p:475-503
    DOI: 10.1177/00197939221138759
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    Cited by:

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    2. Kevin Rinz, 2022. "Did Timing Matter? Life Cycle Differences in Effects of Exposure to the Great Recession," Journal of Labor Economics, University of Chicago Press, vol. 40(3), pages 703-735.
    3. Marinescu, Ioana & Ouss, Ivan & Pape, Louis-Daniel, 2021. "Wages, hires, and labor market concentration," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 506-605.
    4. Jérémy Tanguy & Sylvie Blasco & Johanne Bacheron & Eva Moreno Galbis, 2024. "Labor market concentration and gender gaps," French Stata Users' Group Meetings 2024 31, Stata Users Group.
    5. Wenting Ma, 2024. "Employer Dominance and Worker Earnings in Finance," Working Papers 24-41, Center for Economic Studies, U.S. Census Bureau.
    6. Fernández-Villaverde, Jesús & Mandelman, Federico & Yu, Yang & Zanetti, Francesco, 2021. "The “Matthew effect” and market concentration: Search complementarities and monopsony power," Journal of Monetary Economics, Elsevier, vol. 121(C), pages 62-90.
    7. Michael A Clemens, 2022. "The economic and fiscal effects on the United States from reduced numbers of refugees and asylum seekers," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(3), pages 449-486.
    8. Samuel Dodini & Kjell Salvanes & Alexander L.P. Willén & Kjell G. Salvanes, 2021. "The Dynamics of Power in Labor Markets: Monopolistic Unions versus Monopsonistic Employers," CESifo Working Paper Series 9495, CESifo.
    9. Bassanini, Andrea & Batut, Cyprien & Caroli, Eve, 2021. "Labor Market Concentration and Stayers' Wages: Evidence from France," IZA Discussion Papers 14912, Institute of Labor Economics (IZA).
    10. Esteban Rossi-Hansberg & Pierre-Daniel Sarte & Nicholas Trachter, 2021. "Diverging Trends in National and Local Concentration," NBER Macroeconomics Annual, University of Chicago Press, vol. 35(1), pages 115-150.
    11. Ioana Marinescu & Yue Qiu & Aaron Sojourner, 2021. "Wage Inequality and Labor Rights Violations," NBER Working Papers 28475, National Bureau of Economic Research, Inc.
    12. Michael A. Clemens, 2021. "The Fiscal Effect of Immigration: Reducing Bias in Influential Estimates," RF Berlin - CReAM Discussion Paper Series 2134, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    13. Albert Jan Hummel, 2021. "Monopsony power, income taxation and welfare," Tinbergen Institute Discussion Papers 21-051/VI, Tinbergen Institute.
    14. Lehner, Lukas & Parolin, Zachary & Pignatti, Clemente & Schmitt, Rafael Pintro, 2024. "Monopsony Power and Poverty: The Consequences of Walmart Supercenter Openings," IZA Discussion Papers 17323, Institute of Labor Economics (IZA).
    15. Popp, Martin, 2024. "Minimum Wages in Concentrated Labor Markets," IZA Discussion Papers 17357, Institute of Labor Economics (IZA).
    16. Taskin, Ahmet Ali & Yaman, Firat, 2023. "The effect of branching deregulation on finance wage premium," FAU Discussion Papers in Economics 08/2023, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    17. Emilio Colombo & Alberto Marcato, 2021. "Skill Demand and Labour Market Concentration: Theory and Evidence from Italian Vacancies," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis2104, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).
    18. Gregor Jarosch & Isaac Sorkin & Jan Sebastian Nimczik, 2019. "Granular Search, Concentration and Wages," 2019 Meeting Papers 1018, Society for Economic Dynamics.
    19. Petach, Luke, 2024. "Monopsony in the market for religion," Journal of Economic Behavior & Organization, Elsevier, vol. 221(C), pages 423-435.
    20. Azar, José & Marinescu, Ioana & Steinbaum, Marshall & Taska, Bledi, 2020. "Concentration in US labor markets: Evidence from online vacancy data," Labour Economics, Elsevier, vol. 66(C).
    21. Saxell, Tanja & Nurminen, Mikko, 2020. "Physician Prices and Competition: Evidence from Acquisitions in the Private Health Care Sector," Working Papers 130, VATT Institute for Economic Research.
    22. Axelle Arquié & Julia Bertin, 2022. "The Heterogenous Effects of Employers’ Concentration on Wages: Better Sorting or Uneven Rent Extracting?," Working Papers 2022-09, CEPII research center.
    23. Albert Jan Hummel, 2021. "Monopsony Power, Income Taxation and Welfare," CESifo Working Paper Series 9128, CESifo.
    24. Zhuravleva, Nadezhda, 2021. "How Bad Is Labor Market Concentration?: Evidence From Soviet (Urban) Satellites," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242405, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    labor-market concentration; wages; health insurance; unions;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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