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Labor Market Concentration does not Explain the Falling Labor Share

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  • Ben Lipsius

Abstract

Using U.S. administrative data, this paper shows that the employment-weighted average labor market concentration has been declining since 1980 - the opposite of the change needed to explain the falling labor share. The relationship between wages and labor market concentration has also weakened (become less negative) over that time. Together, these results make labor market concentration an implausible driver of the falling labor share despite a strong, negative relationship between labor market concentration and wages.

Suggested Citation

  • Ben Lipsius, 2018. "Labor Market Concentration does not Explain the Falling Labor Share," 2018 Papers pli1202, Job Market Papers.
  • Handle: RePEc:jmp:jm2018:pli1202
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Why Local Labor Market Concentration Is Lower Than It Used to Be, Even As National Concentration Increases
      by Kevin Rinz in Pro-Market on 2019-01-02 13:35:10

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    Cited by:

    1. Jarosch, Gregor & Nimczik, Jan Sebastian & Sorkin, Isaac, 2019. "Granular Search, Market Structure, and Wages," IZA Discussion Papers 12574, Institute of Labor Economics (IZA).
    2. Ioana Marinescu & Ivan Ouss & Louis-Daniel Pape, 2020. "Wages, Hires, and Labor Market Concentration," NBER Working Papers 28084, National Bureau of Economic Research, Inc.
    3. Georg Graetz, 2019. "Labor Demand in the Past, Present, and Future," European Economy - Discussion Papers 2015 - 114, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    4. Gregor Jarosch & Isaac Sorkin & Jan Sebastian Nimczik, 2019. "Granular Search, Concentration and Wages," 2019 Meeting Papers 1018, Society for Economic Dynamics.
    5. Matthew E. Kahn & Joseph Tracy, 2019. "Monopsony in Spatial Equilibrium," Working Papers 1912, Federal Reserve Bank of Dallas.
    6. Graetz, Georg, 2020. "Technological change and the Swedish labor market," Working Paper Series 2020:19, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Steven Berry & Martin Gaynor & Fiona Scott Morton, 2019. "Do Increasing Markups Matter? Lessons from Empirical Industrial Organization," Journal of Economic Perspectives, American Economic Association, vol. 33(3), pages 44-68, Summer.
    8. Kevin Rinz, 2019. "Did Timing Matter? Life Cycle Differences in Effects of Exposure to the Great Recession," Working Papers 19-25, Center for Economic Studies, U.S. Census Bureau.
    9. 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.
    10. Doraszelski, Ulrich & Jaumandreu, Jordi, 2019. "Using Cost Minimization to Estimate Markups," CEPR Discussion Papers 14114, C.E.P.R. Discussion Papers.

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    More about this item

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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