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Firm Market Power and the Earnings Distribution

  • Webber, Douglas A.

    ()

    (Temple University)

Using linked employer-employee data, I compute firm-level measures of the labor supply elasticity facing each private non-farm firm in the US. I provide the first direct evidence of the positive relationship between a firm's labor supply elasticity and the earnings of its workers. I also contrast the dynamic model method employed by this paper with the more traditional use of concentration ratios to measure a firm's labor market power. Finally, I construct a counterfactual earnings distribution which allows the effects of firm market power to vary across the earnings distribution.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7342.

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Length: 50 pages
Date of creation: Apr 2013
Date of revision:
Publication status: published in: Labour Economics, 2015, 35, 123-134
Handle: RePEc:iza:izadps:dp7342
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