Labor Market Concentration

35 Pages Posted: 8 Jan 2018

See all articles by José Azar

José Azar

University of Navarra, IESE Business School; CEPR

Ioana Elena Marinescu

University of Pennsylvania - School of Social Policy & Practice; National Bureau of Economic Research (NBER)

Marshall Steinbaum

University of Utah Department of Economics

Multiple version iconThere are 3 versions of this paper

Abstract

A product market is concentrated when a few firms dominate the market. Similarly, a labor market is concentrated when a few firms dominate hiring in the market. Using data from the leading employment website CareerBuilder.com, we calculate labor market concentration for over 8,000 geographic-occupational labor markets in the US. Based on the DOJ-FTC horizontal merger guidelines, the average market is highly concentrated. Using a panel IV regression, we show that going from the 25th percentile to the 75th percentile in concentration is associated with a 17% decline in posted wages, suggesting that concentration increases labor market power.

Keywords: monopsony, oligopsony, labor markets, competition policy

JEL Classification: J30, J42, L40

Suggested Citation

Azar, José and Marinescu, Ioana Elena and Steinbaum, Marshall, Labor Market Concentration. IZA Discussion Paper No. 11254. Available at SSRN: https://ssrn.com/abstract=3097372

José Azar (Contact Author)

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

CEPR ( email )

London
United Kingdom

HOME PAGE: http://https://sites.google.com/site/joseazar/

Ioana Elena Marinescu

University of Pennsylvania - School of Social Policy & Practice ( email )

3701 Locust Walk
Philadelphia, PA 19104-6214
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Marshall Steinbaum

University of Utah Department of Economics ( email )

1645 Central Campus Dr.
Salt Lake City, UT 84112
United States

HOME PAGE: http://https://faculty.utah.edu/u6024209-Marshall_Steinbaum/hm/index.hml

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