Labor-Market Concentration and Labor Compensation

79 Pages Posted: 28 Jan 2019

See all articles by Yue Qiu

Yue Qiu

Temple University

Aaron Sojourner

University of Minnesota; IZA Institute of Labor Economics


This paper estimates the effect of labor-market concentration on labor compensation across the U.S. private sector since 2000. We distinguish between concentration in local labor markets versus local product markets, guarding against bias from confounded product-market concentration. Analysis extends beyond wages to rates of employment-based health insurance coverage. Estimates suggest negative effects of labor-market concentration on labor compensation. This comes through both reducing the human-capital level of those in the market and reducing pay conditional on human-capital level. Higher product-market concentration exacerbates and higher unionization rates mitigates these effects.

Keywords: labor-market concentration, monopsony, wages, health insurance, unions

JEL Classification: J31, J32, J42, L13, J51

Suggested Citation

Qiu, Yue and Sojourner, Aaron J., Labor-Market Concentration and Labor Compensation. IZA Discussion Paper No. 12089. Available at SSRN:

Yue Qiu (Contact Author)

Temple University

Aaron J. Sojourner

University of Minnesota ( email )

Carlson School of Management
321 19th Ave S, 3-300
Minneapolis, MN 55455
United States
6126249521 (Phone)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072

Register to save articles to
your library


Paper statistics

Abstract Views
PlumX Metrics