Labor-Market Concentration and Labor Compensation

79 Pages Posted: 28 Jan 2019

See all articles by Yue Qiu

Yue Qiu

Temple University

Aaron Sojourner

W.E. Upjohn Institute for Employment Research; University of Minnesota; IZA Institute of Labor Economics

Abstract

This paper estimates the effect of labor-market concentration on labor compensation across the U.S. private sector since 2000. We distinguish between concentration in local labor markets versus local product markets, guarding against bias from confounded product-market concentration. Analysis extends beyond wages to rates of employment-based health insurance coverage. Estimates suggest negative effects of labor-market concentration on labor compensation. This comes through both reducing the human-capital level of those in the market and reducing pay conditional on human-capital level. Higher product-market concentration exacerbates and higher unionization rates mitigates these effects.

Keywords: labor-market concentration, monopsony, wages, health insurance, unions

JEL Classification: J31, J32, J42, L13, J51

Suggested Citation

Qiu, Yue and Sojourner, Aaron J., Labor-Market Concentration and Labor Compensation. IZA Discussion Paper No. 12089, Available at SSRN: https://ssrn.com/abstract=3323204 or http://dx.doi.org/10.2139/ssrn.3323204

Yue Qiu (Contact Author)

Temple University

Aaron J. Sojourner

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

University of Minnesota

Carlson School of Management
MN
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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