Labor Market Concentration and Wages: Incumbents versus New Hires

Andrea Bassanini, Cyprien Batut and Eve Caroli ()
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Eve Caroli: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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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)
Date: 2023-04
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Citations: View citations in EconPapers (7)

Published in Labour Economics, 2023, 81, pp.102338. ⟨10.1016/j.labeco.2023.102338⟩

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Journal Article: 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:hal:journl:hal-04002685

DOI: 10.1016/j.labeco.2023.102338

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