Working Paper: NBER ID: w24395
Authors: Jos A. Azar; Ioana Marinescu; Marshall I. Steinbaum; Bledi Taska
Abstract: Using data on the near-universe of online US job vacancies collected by Burning Glass Technologies in 2016, we calculate labor market concentration using the Herfindahl-Hirschman index (HHI) for each commuting zone by 6-digit SOC occupation. The average market has an HHI of 4,378, or the equivalent of 2.3 recruiting employers. 60% of labor markets are highly concentrated (above 2,500 HHI) according to the DOJ/FTC guidelines. Highly concentrated markets account for 20% of employment. For manufacturing industries, we show that labor market concentration is distinct from product market concentration, and is negatively correlated with wages in each industry’s top occupation.
Keywords: Labor Market Concentration; Wages; Antitrust; Herfindahl-Hirschman Index; Online Job Vacancies
JEL Codes: J21; J42; K21
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) | Wages (J31) |
| Labor market concentration (HHI) (J42) | Wage suppression (J38) |
| Labor market concentration (HHI) (J42) | Monopsony power among employers (J42) |
| Labor market concentration (HHI) (J42) | Distinct from product market concentration (L19) |
| Product market concentration (L19) | Wages (J31) |