Working Paper: NBER ID: w24147
Authors: Jos Azar; Ioana Marinescu; Marshall I. Steinbaum
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: Labor Market Concentration; Wages; Antitrust Policy
JEL Codes: J2; J3; L1; L4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Labor market concentration (HHI) (J42) | Posted wages (J31) |
| Labor market concentration (HHI) (J42) | Composition of job titles (M54) |
| Labor market concentration (HHI) (J42) | Labor market power (J42) |
| Labor market power (J42) | Posted wages (J31) |