Granular Search, Market Structure, and Wages

Gregor Jarosch, Jan Sebastian Nimczik and Isaac Sorkin

The Review of Economic Studies, 2024, vol. 91, issue 6, 3569-3607

Abstract: We develop a model of size-based market power in a frictional labour market. In the canonical search environment, competition for workers is encoded in outside options. In our granular setting, large employers remove their own job postings from their workers’ outside option. Thus, size gives market power and a more concentrated market structure depresses wages because it reduces competition for workers. We calibrate the model to Austrian data and find that such size-based market power depresses wages by about 2.6% or 1,500 euros annually per worker.

Keywords: Monopsony; Labour market power; Wages; Market structure; Search (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: Granular Search, Market Structure, and Wages (2021)
Working Paper: Granular Search, Market Structure, and Wages (2019)
Working Paper: Granular Search, Market Structure, and Wages (2019)
Working Paper: Granular Search, Market Structure, and Wages (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:91:y:2024:i:6:p:3569-3607.

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