Concentration in US Labor Markets: Evidence from Online Vacancy Data
29 Pages Posted: 12 Mar 2018 Last revised: 21 Mar 2018
Date Written: March 2018
Using data on the near-universe of online US job vacancies collected by Burning Glass Technologies in 2016, we calculate labor market concentration using the Herfindahl-Hirschman index (HHI) for each commuting zone by 6-digit SOC occupation. The average market has an HHI of 3,953, or the equivalent of 2.5 recruiting employers. 54% of labor markets are highly concentrated (above 2,500 HHI) according to the DOJ/FTC guidelines. Highly concentrated markets account for 17% of employment. All plausible alternative market definitions show that more than 33% of markets are highly concentrated, suggesting that employers have market power in many US labor markets.
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