Imperfect Competition, Compensating Differentials and Rent Sharing in the U.S. Labor Market

By Thibaut Lamadon, Magne Mogstad, Bradley Setzler. Social Science Research Network, 2019

223 citations recorded by the source corpus.

We quantify the importance of imperfect competition in the US labor market by estimating the size of labor market rents earned by American firms and workers. We construct a matched employer-employee panel dataset by combining the universe of US business and worker tax records for the period 2001–2015. Using this panel data, we identify and estimate an equilibrium model of the labor market with two-sided heterogeneity where workers view firms as imperfect substitutes because of heterogeneous preferences over nonwage job characteristics. The model allows us to draw inference about imperfect competition, worker sorting, compensating differentials, and rent sharing. (JEL D24, H24, H25, J22, J24, J31, J42)

Subfields: Economics and Econometrics, Gender Studies

View Paper: https://www.semanticscholar.org/paper/76572725297f225d45a6ffa106827ba7262d4b63

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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

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