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How Bad Is Labor Market Concentration?: Evidence From Soviet (Urban) Satellites

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  • Zhuravleva, Nadezhda

Abstract

There is a debate about the labor market concentration being behind the anemic development of US wages over the past decades. The absence of exogenous variations for causal inference complicates this debate. Here, data from other countries can help. I exploit a variation from a quasi-natural experiment rooted in the practice of urban and industrial planning of the Soviet Union. The Soviet planners developed green-field urban satellites and industrial plants hand-in-hand as large lumpy units. This lumpiness creates variations of concentration in Russia's labor markets still today. Using this variation, I find that concentration significantly hurts wages. A 10% increase in the number of firms leads to a 5% increase in wages.

Suggested Citation

  • 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.
    • Handle: RePEc:zbw:vfsc21:242405
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • 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

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