Labor Market Concentration and Wages: Incumbents versus New Hires

Andrea Bassanini, Cyprien Batut and Eve Caroli

Labour Economics, 2023, vol. 81, issue C

Abstract: We investigate the impact of labor market concentration on average wages and decompose it into its effects on new hires and incumbents, where incumbents are defined as individuals who were already employed in the same firm the year before. Using administrative data for France, we find that concentration negatively affects both new hires’ and incumbents’ wages with elasticities ranging from -0.0287 to -0.0296 and -0.0185 to -0.0230, respectively. It also reduces the probability that a worker be a new hire rather than an incumbent. When decomposing the overall effect of labor market concentration on wages into its different components, we find that the negative effect on incumbents’ wages accounts for between two thirds and three fourth of the total.

Keywords: labor market concentration; monopsony; wages; incumbents (search for similar items in EconPapers)
JEL-codes: J31 J42 L41 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (7)

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Working Paper: Labor Market Concentration and Wages: Incumbents versus New Hires (2023)
Working Paper: Labor Market Concentration and Wages: Incumbents versus New Hires (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:81:y:2023:i:c:s0927537123000131

DOI: 10.1016/j.labeco.2023.102338

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