Strong Employers and Weak Employees: How Does Employer Concentration Affect Wages?

Efraim Benmelech, Nittai K. Bergman and Hyunseob Kim

Journal of Human Resources, 2022, vol. 57, issue S, s200-s250

Abstract: We analyze the effect of local-level labor market concentration on wages. Using plant-level U.S. Census data during 1978–2016, we find that: (i) local-level employer concentration exhibits substantial cross-sectional variation; (ii) consistent with labor market monopsony power, there is a negative relation between local-level employer concentration and wages that strengthens with time; (iii) instrumenting concentration with merger activity shows that increased employer concentration decreases wages; (iv) the negative relation between employer concentration and wages increases when unionization rates are low; and (v) the link between productivity growth and wage growth is stronger when labor markets are less concentrated. Our results emphasize the role of local labor market monopsonies in influencing firm wage-setting.

JEL-codes: E24 J51 J61 J62 L13 (search for similar items in EconPapers)
Date: 2022
Note: DOI: 10.3368/jhr.monopsony.0119-10007R1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (66)

Downloads: (external link)
http://jhr.uwpress.org/cgi/reprint/57/S/S200
A subscription is required to access pdf files. Pay per article is available.

Related works:
Working Paper: Strong Employers and Weak Employees: How Does Employer Concentration Affect Wages? (2018)
Working Paper: Strong Employers and Weak Employees: How Does Employer Concentration Affect Wages? (2018)
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:uwp:jhriss:v:57:y:2022:i:s:p:s200-s250

Access Statistics for this article

More articles in Journal of Human Resources from University of Wisconsin Press
Bibliographic data for series maintained by ().