Granular Search, Market Structure, and Wages

Gregor Jarosch, Jan Nimczik and Isaac Sorkin
Additional contact information
Gregor Jarosch: Princeton University and NBER
Jan Nimczik: ESMT Berlin and IZA

Working Papers from Princeton University. Economics Department.

Abstract: We develop a model where labor market structure affects the division of surplus between firms and workers. In a model of random search and large employers, workers might apply to another job controlled by the same employer in the future. This possibility endows firms with size-based market power. The reason is that outside options are truly outside the firm: firms do not compete with their own vacancies. Hence, a worker’s outside option is worse when bargaining with a larger firm, and wages depend on market structure. We calibrate the model to Austrian data and find that such size-based market power depresses wages.

Keywords: labor market; labor economics (search for similar items in EconPapers)
JEL-codes: E20 J01 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-com, nep-cwa, nep-dge, nep-hrm and nep-mac
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Granular Search, Market Structure, and Wages (2024)
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:pri:econom:2021-38

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