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Antitrust Enforcement Increases Economic Activity

Author

Listed:
  • Babina, Tania
  • Barkai, Simcha
  • Jeffers, Jessica
  • Karger, Ezra
  • Volkova, Ekaterina

Abstract

We hand-collect information describing all 3,055 antitrust lawsuits brought by the Department of Justice (DOJ) between 1971 and 2018. Using confidential U.S. Census microdata, we show that DOJ lawsuits targeting past anticompetitive conduct in local industries cause a persistent 5.4% increase in employment and 4.1% increase in business formation compared to the same industries in other states. We further find (1) a sharp increase in payroll exceeding the increase in employment, (2) an economically and statistically insignificant increase in sales, and (3) a precise increase in the labor share. Our results show that government antitrust enforcement increases economic activity.

Suggested Citation

  • Babina, Tania & Barkai, Simcha & Jeffers, Jessica & Karger, Ezra & Volkova, Ekaterina, 2024. "Antitrust Enforcement Increases Economic Activity," CEPR Discussion Papers 18772, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18772
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    More about this item

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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