Common Ownership in Labor Markets

67 Pages Posted: 22 Jul 2022

See all articles by José Azar

José Azar

University of Navarra, IESE Business School; CEPR; ECGI

Yue Qiu

Temple University

Aaron Sojourner

W.E. Upjohn Institute for Employment Research; University of Minnesota; IZA Institute of Labor Economics

Date Written: July 9, 2022


In this paper, we study common ownership in U.S. labor markets, and document that common ownership more than doubled over the period 1999–2017. To identify the causal effects of common ownership on labor market outcomes, we use a firm’s addition to the S&P 500 index as a shock to the common ownership of its competitors in local labor markets. Using a matched difference-in-differences analysis, we find that, after a firm enters the S&P 500 index, the average annual earnings per employee of its local competitors decrease relative to the counterfactual. The effect of S&P 500 index additions on employee earnings is stronger in local labor markets where the employment shares of S&P 500 firms were higher or union coverage rates were lower ex ante. The effect is not driven by changes in workforce characteristics. We also find that an increase in common ownership leads to higher separation rates in treated local labor markets. Perhaps surprisingly, it increases their hiring rates even more, resulting in an overall positive effect on total employment. While together these facts are inconsistent with the canonical oligopsony model, we show that they can be rationalized in a generalized model of oligopsony with a recruitment intensity decision by firms.

Keywords: Monopsony, Oligopsony, Labor Markets, Competition Policy, Common Ownership

JEL Classification: J42, J31, L40, D40, G34

Suggested Citation

Azar, José and Qiu, Yue and Sojourner, Aaron J., Common Ownership in Labor Markets (July 9, 2022). Available at SSRN: or

José Azar

University of Navarra, IESE Business School ( email )

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Barcelona, 08034

CEPR ( email )

United Kingdom

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ECGI ( email )

c/o the Royal Academies of Belgium
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Yue Qiu (Contact Author)

Temple University ( email )

Philadelphia, PA 19122
United States

Aaron J. Sojourner

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

University of Minnesota

Carlson School of Management
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072

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