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

Efraim Benmelech, Nittai K. Bergman and Hyunseob Kim

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: We analyze the effect of local-level labor market concentration on wages. Using plant-level U.S. Census data over the period 1977–2009, we find that: (1) local-level employer concentration exhibits substantial cross-sectional and time-series variation and increases over time; (2) consistent with labor market monopsony power, there is a negative relation between local-level employer concentration and wages that is more pronounced at high levels of concentration and increases over time; (3) the negative relation between labor market concentration and wages is stronger when unionization rates are low; (4) the link between productivity growth and wage growth is stronger when labor markets are less concentrated; and (5) exposure to greater import competition from China (the “China Shock”) is associated with more concentrated labor markets. These five results emphasize the role of local-level labor market monopsonies in influencing firm wage-setting.

Pages: 49 pages
Date: 2018-04
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (118)

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https://www2.census.gov/ces/wp/2018/CES-WP-18-15.pdf First version, 2018 (application/pdf)

Related works:
Journal Article: Strong Employers and Weak Employees: How Does Employer Concentration Affect Wages? (2022)
Working Paper: Strong Employers and Weak Employees: How Does Employer Concentration Affect Wages? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:18-15

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