Labor Market Power

David Berger, Kyle Herkenhoff and Simon Mongey

No 1231, 2019 Meeting Papers from Society for Economic Dynamics

Abstract: We develop a general equilibrium oligopsony model of the US labor market. To parameterize the model we use Census data to estimate within-state-firm, across-region differences in the response of employment and wages to state corporate tax changes. We show that the distribution of wage-bill Herfindahls is a sufficient statistic for the aggregate labor share, and we document that the employment-weighted wage-bill Herfindahl fell from 1976 to 2014. After estimating our model to match 2014 levels of labor market concentration, we find that the welfare gains associated with a Walrasian equilibrium range from 4 to 18 percent. Lastly, we show that the model is able to capture the reallocation of employment across the distribution of firms in response to a minimum wage hike.

Date: 2019
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Citations: View citations in EconPapers (45)

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Related works:
Journal Article: Labor Market Power (2022)
Working Paper: Labor Market Power (2021)
Working Paper: Labor Market Power (2019)
Working Paper: Labor Market Power (2019)
Working Paper: Labor Market Power (2019)
Working Paper: Labor Market Power (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed019:1231

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