Merger guidelines for the labor market

David Berger, Thomas Hasenzagl, Kyle Herkenhoff, Simon Mongey and Eric A. Posner

Journal of Monetary Economics, 2025, vol. 153, issue C

Abstract: What are the welfare, wage, and output implications of applying merger review guidelines to the labor market? To answer this question, we develop a theory of multi-plant ownership and labor market monopsony. We estimate the model using U.S. Census data and demonstrate the model’s ability to replicate empirically documented paths of employment and wages following mergers. We then simulate a representative set of U.S. mergers in order to evaluate merger review thresholds. Assuming mergers generate efficiency gains of 5 percent, our simulations yield welfare losses under the enforcement of the more lenient 2010 merger guidelines and welfare gains under enforcement of the more stringent 2023 and 1982 merger guidelines. Lastly, we estimate the aggregate effects of allowed mergers on output and labor’s share of income under each set of merger guidelines.

Keywords: Merger guidelines; Labor markets; Oligopsony (search for similar items in EconPapers)
JEL-codes: E2 J2 J42 K21 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S030439322500056X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:153:y:2025:i:c:s030439322500056x

DOI: 10.1016/j.jmoneco.2025.103785

Access Statistics for this article

Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser

More articles in Journal of Monetary Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().