Labor market concentration and welfare

Grant description:

This project will examine how mergers have affected competition in the U.S. labor market from 1976 to 2014. The researchers will use the U.S. Census Bureau’s Longitudinal Business Database from 1976 to 2014, in conjunction with a new theoretic framework of oligopsony, to measure the effects of mergers on monopsony power and labor market outcomes, including labor’s share of income and welfare. In addition, they will use the Longitudinal Employer Household Dynamics database from 1992 to 2014 to measure how mergers differentially affect low- and high-wage workers, and how these effects differ systematically by characteristics of the worker’s labor market, such as number of firms, and concentration. They will measure job mobility and subsequent earnings losses for those displaced following a merger, thus linking mergers to income inequality and the rich literature on earnings losses of displaced workers.