Labor market concentration and heterogeneous effects on wages: Evidence from Japan

Atsuko Izumi, Naomi Kodama and Hyeog Ug Kwon

Journal of the Japanese and International Economies, 2023, vol. 67, issue C

Abstract: This study provides empirical evidence of the impact of labor market concentration on wages. We find that (1) wages are suppressed in more concentrated labor markets, (2) labor rigidity is associated with wage responsiveness to labor market concentration, (3) the impact of labor market concentration on wages is smaller for firms with more competitive downstream product markets, and (4) greater job opportunities outside the manufacturing sector weaken the relationship between concentration and wages. In sum, our findings indicate that labor rigidity and the degree of competition in downstream product markets, as well as outside options, affect the relationship between market concentration and wages.

Keywords: Concentrated labor market; Heterogenous effects; Labor share; Market power; Wage markdowns; Labor mobility (search for similar items in EconPapers)
JEL-codes: D33 J23 J31 J42 K21 L49 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:67:y:2023:i:c:s088915832200051x

DOI: 10.1016/j.jjie.2022.101242

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