Labor-Market Concentration and Labor Compensation

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 extend...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Qiu, Yue, Sojourner, Aaron J
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2019
Subjects
Compensation
Economic models
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Summary: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.