Employer Concentration and Outside Options
030822-WP-Employer Concentration and Outside Options-Schubert Stansbury and Taska
An updated version of this working paper was uploaded on March 8, 2022.
Gregor Schubert, Harvard University
Anna Stansbury, Harvard University
Bledi Taska, Burning Glass Technologies
We study the effect of within-occupation employer concentration and outside-occupation job options on wages in the US, identifying outside-occupation options using new occupational mobility data from 16 million resumes. Using shift-share instruments to identify plausibly exogenous local variation, we find that moving from the median to 95th percentile of employer concentration reduces wages by 2.6% on average and by 7.3% for workers in the lowest quartile of outward occupational mobility. We also find meaningful effects of changes in the value of outside-occupation job options on wages. Our findings imply that policymakers should take employer concentration seriously, but that measures of employer concentration – typically calculated for single occupations – should be considered alongside occupational mobility and the availability of outside-occupation options.