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Labor Market Concentration in Germany

Author

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  • Oberfichtner, Michael

    (Institute for Employment Research (IAB), Nuremberg)

  • Popp, Martin

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

Using register data, we document that the average German labor market, defined by hires in combinations of 3-digit occupations, requirement levels, and commuting zones, is highly concentrated ( HHI =0.257). By EU antitrust thresholds, 56 percent of these labor markets feature moderate or high concentration, covering 9 percent of workers. Concentration remained relatively stable between 2012 and 2023. The labor market delineation strongly affects the measured level of concentration but not its evolution, whereas the choice of the firm size variable has little influence. Concentration differs starkly across occupations and regions, and workers in complex jobs experience the highest levels of concentration.

Suggested Citation

  • Oberfichtner, Michael & Popp, Martin, 2025. "Labor Market Concentration in Germany," IZA Discussion Papers 17745, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17745
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    More about this item

    Keywords

    labor market concentration; monopsony power; occupations;
    All these keywords.

    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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