Concentration in US Labor Markets: Evidence From Online Vacancy Data

Abstract

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Some facts about concentrated labor markets in the United States

“…This relationship between employer concentration and wages in the manufacturing sector is growing over time and reduces the link between productivity growth and wage growth. Rinz (2022), Lipsius (2018), and Macaluso et al (2019) find similar relationships between employer concentration and wages to Benmelech et al across all sectors, although these papers find employer concentration at the local level—in sectors other than manufacturing—has been declining over time. Rinz (2022) explains that this decline has happened as nationwide employers enter an increasing number of local markets.…”

Market power and monetary policy transmission

“…These and other papers—including Gutiérrez and Philippon (2016), IMF (2019), Azar et al . (2018) and Benmelech et al . (2018)—explore empirically the effects of rising market power on a range of economic outcomes, including innovation, investment, wages or the labour income share.…”

“…A number of recent papers document an increase in market concentration (Autor and Katz 2017;Bajgar et al 2019;Grullon et al 2019), profitability (Barkai 2017;Covarrubias et al (2019) and price markups (De Loecker and Eeckhout 2018;De Loecker et al 2020;Díez et al 2018Díez et al , 2021 in the USA and, to a lesser extent, other advanced economies-although the magnitude of these increases and their interpretation remain debated (Basu 2019;Hall 2018;Van Reenen 2018). These and other papers-including Gutiérrez and Philippon (2016), IMF (2019), Azar et al (2018) and Benmelech et al (2018)-explore empirically the effects of rising market power on a range of economic outcomes, including innovation, investment, wages or the labour income share. Yet others trace back major secular macroeconomic trends to increased market power (Caballero et al 2017;Eggertsson et al 2018;Philippon 2019;Stiglitz 2015).…”

Oligopsonies over the Business Cycle

“…Differently, a recent literature has highlighted the importance of market power for both product and labor markets. In particular, local labor markets have proven to be particularly concentrated (see Azar et al (2018) and Benmelech et al (2018)), giving local employers significant bargaining power.…”