Market Power and Wage Inequality

Shubhdeep Deb, Jan Eeckhout, Asseem Patel and Lawrence Warren

No 17569, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We propose a theory of how market power affects wage inequality. We ask how goods and labor market power jointly affect the level of wages, the Skill Premium, and wage inequality. We then use detailed microdata from the US Census between 1997 and 2016 to estimate the parameters of labor supply, technology and the market structure. We find that a less competitive market structure lowers the wage level, contributes 7% to the rise in the Skill Premium and accounts for half of the increase in between-establishment wage variance.

JEL-codes: C6 D3 D4 D5 L1 (search for similar items in EconPapers)
Date: 2022-10
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Related works:
Working Paper: Market Power and Wage Inequality (2022)
Working Paper: Market Power And Wage Inequality (2022)
Working Paper: Market power and wage inequality (2022)
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