Imperfect Competition, Compensating Differentials, and Rent Sharing in the US Labor Market

Thibaut Lamadon, Magne Mogstad and Bradley Setzler

American Economic Review, 2022, vol. 112, issue 1, 169-212

Abstract: We quantify the importance of imperfect competition in the US labor market by estimating the size of labor market rents earned by American firms and workers. We construct a matched employer-employee panel dataset by combining the universe of US business and worker tax records for the period 2001–2015. Using this panel data, we identify and estimate an equilibrium model of the labor market with two-sided heterogeneity where workers view firms as imperfect substitutes because of heterogeneous preferences over nonwage job characteristics. The model allows us to draw inference about imperfect competition, worker sorting, compensating differentials, and rent sharing.

JEL-codes: D24 H24 H25 J22 J24 J31 J42 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (70)

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Related works:
Working Paper: Imperfect Competition, Compensating Differentials and Rent Sharing in the U.S. Labor Market (2019)
Working Paper: Imperfect Competition, Compensating Differentials and Rent Sharing in the U.S. Labor Market (2019)
Working Paper: Imperfect competition, compensating differentials and rent sharing in the U.S. labor market (2019)
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DOI: 10.1257/aer.20190790

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