Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. 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 employmentbased health insurance coverage. Estimates suggest negative effects of labor-market concentration on labor compensation. This comes through both reducing the humancapital 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. JEL Classification:J31, J32, J42, L13, J51 4 based health insurance coverage. This is a substantial component of labor compensation. In recent data on U.S. private-sector workers, the cost of employee health insurance to employers equaled about 11% of wage and salary costs. 3 We find evidence of negative effects, suggesting that the prior literature's focus only on wages omits part of the compensation effect.Fourth, we study how the relationship between labor-market concentration and labor compensation differs depending on the degree of product-market concentration, worker unionization, and occupational offshorability. Our novel ability to measure both labor and product market concentration enables this first test. It finds that negative effects of labormarket concentration are strengthened by greater product-market concentration. Firms' product-market rents do not immediately translate into higher labor compensation, especially in the context of greater labor-market concentration. However, the presence of strong worker organization appears to have the opposite effect, countervailing the negative effects of labor-market concentration. Benmelech et al used national-level unionization rates in the handful of industries they studied and found that concentration had more-negative effects in less-unionized industries. We generalize this across the whole labor market and exploit variation in occupational unionization rates across state-year. We also find evidence that unionization counteracts the negative effects of concentration. Lastly, contrary to expectations from theory, occupational offshorability is estimated to not affect the relationship.

This paper studies the effects of labor adjustment costs on corporate risk management. Labor adjustment costs attenuate the correlation between the internal funds of a firm and its investment opportunity, and create more incentives for the firm to smooth internal funds. Using a state border discontinuity approach, I find that state-level labor protection laws significantly impact a firm’s use of foreign currency derivative contracts. I further find that a firm holds more cash when labor adjustment costs are larger, and such an effect concentrates on firms that do not engage in derivative hedging.

We measure U.S. listed companies’ skilled labor risk—that is, the potential failure in attracting and retaining skilled labor, by the intensity of discussions on this issue in 10-K filings. We show that this measure effectively captures firm risk due to the mobility of skilled labor. We find that an increase from the 25th to the 75th percentile in the skilled labor risk would increase the skilled labor wage by 22% (or $15,593) and also lead to higher equity-based incentive pay. The skilled labor risk also interacts with other corporate policies such as financial leverage, cash holdings, and M&As.