Labor Market Concentration Does Not Explain the Falling Labor Share
40 Pages Posted: 29 Nov 2018
Date Written: November 2018
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.
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