Firm Market Power and the Earnings Distribution

By Douglas A. Webber. Social Science Research Network, 2015

134 citations recorded by the source corpus.

Using linked employer-employee data, I compute firm-level measures of the labor supply elasticity facing each private non-farm firm in the US. I provide the first direct evidence of the positive relationship between a firm's labor supply elasticity and the earnings of its workers. I also contrast the dynamic model method employed by this paper with the more traditional use of concentration ratios to measure a firm's labor market power. Finally, I construct a counterfactual earnings distribution which allows the effects of firm market power to vary across the earnings distribution.

Subfields: Economics and Econometrics, Gender Studies, General Health Professions

View Paper: https://www.semanticscholar.org/paper/6a64c64e3aa14c3f003384c40e4f3d20e6116901

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. Alan Manning
2. M. Alan
3. David H. Autor
4. J. V. van Ommeren
5. Giuseppe Ragusa
6. F. Mazzolari
7. Mogens Fosgerau

In Gender Studies

1. Alan Manning
2. M. Alan
3. J. V. van Ommeren
4. Mogens Fosgerau

In General Health Professions

1. Alan Manning
2. David H. Autor
3. F. Mazzolari
4. Giuseppe Ragusa

Citations in the corpus

• Monopsony in Labor Markets: A Review (2020, background): “More generally, Webber (2015) found 7The other side of this coin is that monopsony predicts a weaker association between the supply shocks and wages: This has attracted little attention. more monopsony power in lower-wage labor markets, which would lead to greater inequality in wages than marginal…”
• Fairness and Frictions: The Impact of Unequal Raises on Quit Behavior (2018, unknown): “Using payroll data, several studies have estimated separation elasticities between -2 and zero, implying large search frictions (Ransom and Oaxaca 2010; Hirsch, Shank and Schnabel 2010; Sorenson and Depew 2013; Webber 2013).”
• Monopsony in Labor Markets: A Meta-Analysis (2020, unknown): “…and Yuchtman 2013; Balasubramanian et al. 2018; Krueger and Ashenfelter 2018), differentiated jobs (Card, Cardoso, et al. 2018), moving costs (Ransom 2019), and labor market concentration (Brummund 2011; Webber 2015; Azar, Marinescu, and Steinbaum 2017; Benmelech, Bergman, and Kim 2018; Rinz 2019).”