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Granular Search, Concentration and Wages

Author

Listed:
  • Gregor Jarosch

    (Princeton University)

  • Isaac Sorkin

    (Stanford University)

  • Jan Sebastian Nimczik

    (Humboldt University Berlin)

Abstract

This paper develops an approach to measuring labor market power that builds on the structure of a canonical search model. We relax the common assumption of a continuum of firms and assume that firms can commit not to compete with their own future job openings. This granular extension yields a micro-founded concentration index similar to the Herfindahl and a structural mapping between the index and labor market outcomes. Empirically, we define labor markets based on worker flows and then use our framework to quantify the consequences of market power in the Austrian labor market.

Suggested Citation

  • Gregor Jarosch & Isaac Sorkin & Jan Sebastian Nimczik, 2019. "Granular Search, Concentration and Wages," 2019 Meeting Papers 1018, Society for Economic Dynamics.
    • Handle: RePEc:red:sed019:1018
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    References listed on IDEAS

    as
    1. Azar, José & Marinescu, Ioana & Steinbaum, Marshall & Taska, Bledi, 2020. "Concentration in US labor markets: Evidence from online vacancy data," Labour Economics, Elsevier, vol. 66(C).
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    3. Webber, Douglas A., 2015. "Firm market power and the earnings distribution," Labour Economics, Elsevier, vol. 35(C), pages 123-134.
    4. Efraim Benmelech & Nittai K. Bergman & Hyunseob Kim, 2022. "Strong Employers and Weak Employees: How Does Employer Concentration Affect Wages?," Journal of Human Resources, University of Wisconsin Press, vol. 57(S), pages 200-250.
    5. Yue Qiu & Aaron Sojourner, 2023. "Labor-Market Concentration and Labor Compensation," ILR Review, Cornell University, ILR School, vol. 76(3), pages 475-503, May.
    6. Manolis Galenianos & Philipp Kircher & Gábor Virág, 2011. "Market Power And Efficiency In A Search Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(1), pages 85-103, February.
    7. Kevin Rinz, 2018. "Labor Market Concentration, Earnings Inequality, and Earnings Mobility," CARRA Working Papers 2018-10, Center for Economic Studies, U.S. Census Bureau.
    8. Claudia Macaluso & Brad Hershbein & Chen Yeh, 2019. "Concentration in U.S. local labor markets: evidence from vacancy and employment data," 2019 Meeting Papers 1336, Society for Economic Dynamics.
    9. Ben Lipsius, 2018. "Labor Market Concentration does not Explain the Falling Labor Share," 2018 Papers pli1202, Job Market Papers.
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