Grant Category

Market Structure

Are markets becoming less competitive and, if so, why, and what are the larger implications?

The premise of a market economy is that broad-based economic gains come from a well-functioning market. Yet there is evidence that growing economic inequality is undermining our society’s ability to act collectively in pursuit of the nation’s welfare. When stakeholders who comprise economic systems subvert institutions for their own gain, the economy loses. If markets are becoming less competitive, the resulting increase in monopoly power could be contributing to these problems.

New data-driven research provides more evidence that markets are increasingly concentrated and that, in many cases, this is indicative of a reduction in competition. Markups, the traditional measure of monopoly power, are growing. Investment and new business start-ups have been falling steadily even as corporate profits are rising. At the same time, labor income as a share of national income is falling. Does the economy suffer from a monopoly problem and, if so, why, and what are the larger implications?

We are interested in research from an aggregate perspective, which has been common in the macroeconomic and labor literatures, as well as sectoral analysis that has been the focus of industrial organization literatures.

  • The causes of increased concentration
  • Consequences of concentration for productivity, investment, and economic growth
  • Consequences of concentration for labor markets and power

Explore the Grants We've Awarded

Reset

Labor Market Collusion through Common Leadership

Grant Year: 2024

Grant Amount: $30,000

Grant Type: academic

This project studies how firms collude in labor markets, studying an overlooked potential mechanism: common leadership, in which the same person holds high-level leadership positions in two competing firms. Common leadership is prohibited by antitrust law, but until the past few years, enforcement was nearly nonexistent. This study focuses on collusion in labor markets in the form of no-poach agreements—specifically, how entry into such agreements affects worker mobility and career trajectories. Preliminary results find entry into collusive agreements in the years following connection through common leadership. No-poach agreements are extremely difficult to study since they are secret in nature. The author will use the largest known case of labor market collusion to overcome this data challenge. In the late 2000s, more than 50 tech companies entered into no-poach agreements. She will use three primary sources of data: court documents, data on worker histories, and biographical data on company executives.

Big Daycare: The Impact of Private Equity-Owned Child Care Businesses on the Market for Early Care and Education

Grant Year: 2024

Grant Amount: $30,000

Grant Type: academic

This project aims to fill the gap on the impact that private-equity-owned child care businesses have on the structure and functioning of the early child care market. The author seeks to answer the following questions: How does private equity affect the market for early career and education? In particular, how different are private-equity-backed child care centers from other child care centers? How do centers change when taken over by a private equity firm? How does the entrance of a private-equity-backed center impact other private and public providers? This research is poised to fill a large void in the child care literature: the role of for-profit providers and, in particular, the effects of new entrants and private-equity-owned operations into child care markets.   

Geospatial Heterogeneity in Inflation: A Market Concentration Story

Grant Year: 2023

Grant Amount: $15,000

Grant Type: doctoral

This project will examine whether there are heterogenous inflation rates across the United States. If so, the authors plan to identify which areas face higher rates of inflation and what mechanisms drive the observed differences. More specifically, the authors will use regional Nielsen Retail Scanner data from 2006–2016 to measure food inflation. This project will also analyze the effects of local market concentration on inflation, adding to the evidence base needed to effectively measure the heterogeneous effects of inflation.

Tracking Hospital Mergers and Understanding Which Markets are Changing

Grant Year: 2023

Grant Amount: $55,000

Grant Type: academic

This project will create a database of hospital mergers over the past 40 years. The database will detail the following: where health systems are merging or divesting to understand which areas/people (including demographic differences) are affected; whether that differs between for-profit and nonprofit hospitals; and whether higher-priced hospitals continue to provide higher-quality care. Beyond the dataset construction, the project will map areas with 2+, 3+, and 4+ hospitals and produce descriptive statistics at various geographic levels. The research team will track the growth in health systems that resulted from acquisitions by analyzing whether for-profit health systems were strategically acquiring hospitals in regions with more affluent, privately insured patients. This project will contribute to our understanding of the impacts of hospital mergers on equity, patient access, and quality of care.

The Role of Regulations in the Development of Labor Market Power: Evidence from Clean Air Act’s New Source Review Permit Program

Grant Year: 2023

Grant Amount: $15,000

Grant Type: doctoral

This project will examine whether regulations increase firms’ labor market power and how changes in labor market structure vis-à-vis regulation affect worker outcomes. Some laws limit how much existing firms must comply with new regulations, while new firms must comply. One example is the Environmental Protection Agency’s New Source Review permitting requirements. The research team seeks to understand how this regulation affects employers’ labor market power. They will use data from the U.S. Census Bureau to link individual earnings with demographic and geographic information. Further, they will use data on counties and industries from the EPA to conduct a difference-in-difference analysis and a two-stage instrumental strategy to estimate the effect of regulation on local labor concentration and worker outcomes. This research will broadly inform regulatory design with worker outcomes in mind.

Concentration and Racial Equity in Meat Processing

Grant Year: 2022

Grant Amount: $15,000

Grant Type: doctoral

This project seeks to provide some of the first causal evidence on how concentration in the meat-processing industry affects producers, workers, and consumers across racial and income groups in the United States. Rising concentration has been especially salient in the meat-processing industry, and recent research connects market power in the product market with monopsony power in the labor market. This project will build and expand on that literature by measuring the effect of consolidation by meat processors on monopoly power in the input and product markets, and monopsony power in the labor market, and then assessing what the implications of these market conditions are on racial inequality, specifically farmer profits, conditions for workers, and prices for consumers.

Experts

Grantee

Blythe George

University of California, Merced

Learn More
Grantee

Eleanor Krause

University of Kentucky

Learn More
Grantee

Patrick Kline

University of California, Berkeley

Learn More
Grantee

Geoffrey Schnorr

University of California, Los Angeles

Learn More
Grantee

Ioana Marinescu

University of Pennsylvania

Learn More