Labor Market Concentration
35 Pages Posted: 8 Jan 2018
There are 3 versions of this paper
Labor Market Concentration
Labor Market Concentration
Labor Market Concentration
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: Suggested Citation