Research ArticleArticles
Open Access

Labor Market Concentration, Wages, and Job Security in Europe

Andrea Bassanini, Giulia Bovini, Eve Caroli, Jorge Casanova-Ferrando, Federico Cingano, Paolo Falco, Florentino Felgueroso, Marcel Jansen, Pedro S. Martins, António Melo, Michael Oberfichtner and Martin Popp
Journal of Human Resources, May 2026, 61 (3) 817-853; DOI: https://doi.org/10.3368/jhr.0223-12757R1

Article Figures & Data

Figures

  • Effect of Labor Market Concentration by Gender Notes: 2SLS estimates. Panels report point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with gender dummies. Local labor markets are defined based on four-digit occupations and Functional Areas (FAs). Panel A: The dependent variable is log(wage). Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel B: The dependent variable is a dummy variable equal to one if the individual is hired on a permanent contract and zero if hired on a temporary contract. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel C reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with gender dummies. The dependent variable is a dummy variable equal to one when the individual was hired on a temporary contract at year t and had/started a permanent contract with the same employer in the following calendar year. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before hiring, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Each interaction between log(HHI) and a gender dummy is instrumented by that gender dummy interacted with the instrument for log(HHI). Standard errors are clustered at the labor-market-by-year level.
    Figure 1

    Effect of Labor Market Concentration by Gender

    Notes: 2SLS estimates. Panels report point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with gender dummies. Local labor markets are defined based on four-digit occupations and Functional Areas (FAs). Panel A: The dependent variable is log(wage). Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel B: The dependent variable is a dummy variable equal to one if the individual is hired on a permanent contract and zero if hired on a temporary contract. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel C reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with gender dummies. The dependent variable is a dummy variable equal to one when the individual was hired on a temporary contract at year t and had/started a permanent contract with the same employer in the following calendar year. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before hiring, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Each interaction between log(HHI) and a gender dummy is instrumented by that gender dummy interacted with the instrument for log(HHI). Standard errors are clustered at the labor-market-by-year level.

  • Effect of Labor Market Concentration by Age Group Notes: 2SLS estimates. Local labor markets are defined based on four-digit occupations and functional areas (FAs). Panel A reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with dummy variables for being younger than 25 (respectively aged 25 and above). The dependent variable is log(wage). Local labor markets are defined based on four-digit occupations and functional areas (FAs). Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel B figure reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with dummy variables for being younger than 25 (respectively aged 25 and above). The dependent variable is a dummy variable equal to one if the individual is hired on a permanent contract and zero if hired on a temporary contract. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel C reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with dummy variables for being younger than 25 (respectively aged 25 and above). The dependent variable is a dummy variable equal to one when the individual was hired on a temporary contract at year t and had/started a permanent contract with the same employer in the following calendar year. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before hiring, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Each interaction between log(HHI) and an age category is instrumented by that age category interacted with the instrument for log(HHI). Monthly wages instead of daily wages are used for Portugal. Standard errors are clustered at the labor-market-by-year level.
    Figure 2

    Effect of Labor Market Concentration by Age Group

    Notes: 2SLS estimates. Local labor markets are defined based on four-digit occupations and functional areas (FAs). Panel A reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with dummy variables for being younger than 25 (respectively aged 25 and above). The dependent variable is log(wage). Local labor markets are defined based on four-digit occupations and functional areas (FAs). Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel B figure reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with dummy variables for being younger than 25 (respectively aged 25 and above). The dependent variable is a dummy variable equal to one if the individual is hired on a permanent contract and zero if hired on a temporary contract. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel C reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with dummy variables for being younger than 25 (respectively aged 25 and above). The dependent variable is a dummy variable equal to one when the individual was hired on a temporary contract at year t and had/started a permanent contract with the same employer in the following calendar year. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before hiring, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Each interaction between log(HHI) and an age category is instrumented by that age category interacted with the instrument for log(HHI). Monthly wages instead of daily wages are used for Portugal. Standard errors are clustered at the labor-market-by-year level.

  • Effect of Labor Market Concentration by Nationality Notes: 2SLS estimates. Local labor markets are defined based on four-digit occupations and functional areas (FAs). Panel A reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with nationality dummies. The dependent variable is log(wage). Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel B reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with nationality dummies. The dependent variable is a dummy variable equal to one if the individual is hired on a permanent contract and zero if hired on a temporary contract. Control variables include gender, nationality, education and yearly dummies for workers’ age, whether the individual was employed the year before, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel C reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with nationality dummies. The dependent variable is a dummy variable equal to one when the individual was hired on a temporary contract at year t and had/started a permanent contract with the same employer in the following calendar year. Control variables include gender, nationality, education and yearly dummies for workers’ age, whether the individual was employed the year before hiring, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Each interaction between log(HHI) and a nationality dummy is instrumented that by that nationality dummy interacted with the instrument for log(HHI). Monthly wages instead of daily wages are used for Portugal. In France, Foreign corresponds to foreign born. Standard errors are clustered at the labor-market-by-year level.
    Figure 3

    Effect of Labor Market Concentration by Nationality

    Notes: 2SLS estimates. Local labor markets are defined based on four-digit occupations and functional areas (FAs). Panel A reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with nationality dummies. The dependent variable is log(wage). Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel B reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with nationality dummies. The dependent variable is a dummy variable equal to one if the individual is hired on a permanent contract and zero if hired on a temporary contract. Control variables include gender, nationality, education and yearly dummies for workers’ age, whether the individual was employed the year before, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel C reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with nationality dummies. The dependent variable is a dummy variable equal to one when the individual was hired on a temporary contract at year t and had/started a permanent contract with the same employer in the following calendar year. Control variables include gender, nationality, education and yearly dummies for workers’ age, whether the individual was employed the year before hiring, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Each interaction between log(HHI) and a nationality dummy is instrumented that by that nationality dummy interacted with the instrument for log(HHI). Monthly wages instead of daily wages are used for Portugal. In France, Foreign corresponds to foreign born. Standard errors are clustered at the labor-market-by-year level.

  • Effect of Labor Market Concentration by Education Notes: Panels reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with education dummies. Higher education is a dummy variable for having upper secondary education or above. Lower education is a dummy variable for having less than upper secondary education. Local labor markets are defined based on four-digit occupations and Functional Areas (FAs). Panel A: The dependent variable is log(wage). Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel B: The dependent variable is a dummy variable equal to one if the individual is hired on a permanent contract and zero if hired on a temporary contract. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel C: The dependent variable is a dummy variable equal to one when the individual was hired on a temporary contract at year t and had/started a permanent contract with the same employer in the following calendar year. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before hiring, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Each interaction between log(HHI) and an education dummy is instrumented by that education dummy interacted with the instrument for log(HHI). Monthly wages instead of daily wages are used for Portugal. Standard errors are clustered at the labor-market-by-year level.
    Figure 4

    Effect of Labor Market Concentration by Education

    Notes: Panels reports point estimates and 90 percent confidence intervals of the coefficients of the interactions of log(HHI) with education dummies. Higher education is a dummy variable for having upper secondary education or above. Lower education is a dummy variable for having less than upper secondary education. Local labor markets are defined based on four-digit occupations and Functional Areas (FAs). Panel A: The dependent variable is log(wage). Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel B: The dependent variable is a dummy variable equal to one if the individual is hired on a permanent contract and zero if hired on a temporary contract. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Panel C: The dependent variable is a dummy variable equal to one when the individual was hired on a temporary contract at year t and had/started a permanent contract with the same employer in the following calendar year. Control variables include gender, education and yearly dummies for workers’ age, whether the individual was employed the year before hiring, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Each interaction between log(HHI) and an education dummy is instrumented by that education dummy interacted with the instrument for log(HHI). Monthly wages instead of daily wages are used for Portugal. Standard errors are clustered at the labor-market-by-year level.

Tables

  • Table 1

    Labor Market Concentration

    HHIMeanSDP25P50P75P90
    Denmark0.05890.10930.00970.02170.05460.1437
    France0.06570.12970.00550.01940.06040.1710
    Germany0.05910.12130.00570.01710.05110.1508
    Italy0.06360.13720.00470.01450.05300.1648
    Portugal0.09570.16860.01080.03110.09210.2654
    Spain0.07020.14900.00510.01690.06000.1806

    • Notes: Herfindahl–Hirschman index based on hiring, computed using firm-by-municipality identifiers. Local labor markets are defined based on four-digit occupations and functional areas (FAs). FAs are defined as FUAs and NUTS-3 regions (excluding the municipalities that are part of a FUA) for which at least 70 percent of the municipalities are not part of a FUA. Districts instead of NUTS-3 regions are used for Portugal. Statistics are weighted by the number of new hires. Labor market concentration is computed over the following time periods: 2011–2018 for Denmark, 2010–2017 for France, 2012–2018 for Germany, 2013–2018 for Italy, 2011–2019 for Portugal, and 2011–2017 for Spain.

  • Table 2

    Labor Market Concentration and Daily Wages of Full-Timers—IV Estimates

    Dep. Var. Daily WagesDenmarkFranceGermanyPortugal
    Log HHI−0.033***−0.022***−0.019***−0.025***
    (0.008)(0.002)(0.002)(0.009)
    KP F-test28.6708.9271.414.6
    Observations6,299,1798,269,37511,050,43515,086,998

    • Notes: 2SLS estimates. The dependent variable is log(wage). Local labor markets are defined based on four-digit occupations and functional areas (FAs). Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Monthly wages instead of daily wages are used for Portugal. Standard errors are clustered at the labor-market-by-year level. KP F-test: Kleibergen–Paap Wald F-test. *p < 0.1, **p < 0.05, ***p < 0.01. Observations include singletons.

  • Table 3

    Labor Market Concentration and Daily Wages of Full-Timers as a Function of Collective Bargaining Coverage—IV Estimates

    Dep. Var. Daily Wages(1)(2)(3)(4)
    Panel A: Germany
    Log HHI−0.0224***−0.0164***−0.0229***−0.0161***
    (0.0029)(0.0026)(0.0029)(0.0026)
    Log HHI*Coverage share, Any CBA0.0112***
    (0.0036)
    Log HHI*High coverage dummy, Any CBA0.0037***
    (0.0011)
    Log HHI*Coverage share, Sector CBA0.0137***
    (0.0033)
    Log HHI*High cover. dummy, Sector CBA0.0044***
    (0.0011)
    KP F-test90.590.590.590.5
    Observations11,050,43511,050,43511,050,43511,050,435
    Panel B: Portugal
    Log HHI−0.0310***−0.0257***−0.0308***−0.0263***
    (0.0094)(0.0090)(0.0092)(0.0090)
    Log HHI*Coverage share, Any CBA0.0070***
    (0.0024)
    Log HHI*High coverage dummy, Any CBA0.0009
    (0.0008)
    Log HHI*Coverage share, Sector CBA0.0083***
    (0.0016)
    Log HHI*High coverage dummy, Sector CBA0.0020**
    (0.0008)
    KP F-test7.37.37.47.3
    Observations15,086,99815,086,99815,086,99815,086,998

    • Notes: 2SLS estimates. The dependent variable is log(wage). Local labor markets are defined based on four-digit occupations and functional areas (FAs). “Coverage share, Any (respectively Sector) CBA” is the proportion of employees covered by any (respectively a sector-level) collective agreement in the industry where the individual is employed. “High coverage dummy, Any (respectively Sector) CBA” is a dummy variable equal to one if the individual is employed in an industry with a proportion of employees covered by any (respectively a sector-level) collective agreement above the median and zero otherwise. Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. In Germany, control variables also include the share of employees covered by a works council in the industry interacted with log(HHI). Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Log(HHI) interacted with a collective bargaining indicator (respectively the works council variable) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation interacted with the collective bargaining indicator (respectively the works council variable). Monthly wages instead of daily wages are used for Portugal. Standard errors are clustered at the labor-market-by-year level. KP F-test: Kleibergen–Paap Wald F-test. *p < 0.1, **p < 0.05, ***p < 0.01. Observations include singletons.

  • Table 4

    Labor Market Concentration and Hourly Wages—IV Estimates

    Dep. Var. Hourly WagesDenmarkFrancePortugal
    Panel A: Full-Timers
    Log HHI−0.033***−0.016***−0.023***
    (0.008)(0.002)(0.008)
    KP F-test29.1721.313.9
    Observations5,989,9678,233,16914,678,273
    Panel B: All Employees
    Log HHI−0.026***−0.014***−0.024***
    (0.005)(0.002)(0.008)
    KP F-test46.7891.615.3
    Observations8,552,21611,435,32916,227,766

    • Notes: 2SLS estimates. The dependent variable is log(wage). Local labor markets are defined based on four-digit occupations and functional areas (FAs). Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. In Panel B, controls also include a dummy variable for whether the individual works full-time or not. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Standard errors are clustered at the labor-market-by-year level. KP F-test: Kleibergen–Paap Wald F-test. *p < 0.1, **p < 0.05, ***p < 0.01. Observations include singletons.

  • Table 5

    Labor Market Concentration and Daily Wages of Full-Timers—IV Estimates, New Hires Versus Incumbents

    Dep. Var. Daily WagesDenmarkFranceGermanyPortugal
    Log HHI*New hire−0.041***−0.024***−0.016***−0.024***
    (0.008)(0.002)(0.002)(0.009)
    Log HHI*Incumbent−0.031***−0.022***−0.020***−0.025***
    (0.008)(0.002)(0.002)(0.008)
    KP F-test14.3354.5135.57.3
    Observations6,299,1798,269,37511,050,43515,086,998

    • Notes: 2SLS estimates. The dependent variable is log(wage). Local labor markets are defined based on four-digit occupations and functional areas (FAs). Control variables include yearly dummies for workers’ age, whether the individual is a new hire, whether the individual was employed the year before if new hire, as well as individual fixed effects, firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Interactions between log(HHI) and another variable are instrumented by this variable interacted with the instrument for log(HHI). Monthly wages instead of daily wages are used for Portugal. Standard errors are clustered at the labor-market-by-year level. KP F-test: Kleibergen–Paap Wald F-test. *p < 0.1, **p < 0.05, ***p < 0.01. Observations include singletons.

  • Table 6

    Labor Market Concentration and Probability of Being Hired on a Permanent Contract—IV Estimates, New Hires Only

    Dep. Var. Perm. ContractFranceGermanyItalyPortugalSpain
    Log HHI−0.0206***−0.0353***−0.0031−0.0503+0.0007
    (0.0046)(0.0119)(0.0065)(0.0313)(0.0018)
    KP F-test592.6255.4102.313.41875.4
    Observations3,530,6604,167,91816,781,4571,039,7924,895,949

    • Notes: 2SLS estimates. The dependent variable is a dummy variable equal to one if the individual is hired on a permanent contract and zero if hired on a temporary contract. Local labor markets are defined based on four-digit occupations and functional areas (FAs). Control variables include gender, education (four categories), yearly dummies for workers’ age, whether the individual was employed the year before, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Standard errors are clustered at the labor-market-by-year level. KP F-test: Kleibergen–Paap Wald F-test. +p < 0.11, *p < 0.1, **p < 0.05, ***p < 0.01. Observations include singletons.

  • Table 7

    Labor Market Concentration and Conversions from Temporary to Permanent Contracts—IV Estimates, New Hires on Temporary Contracts Only

    Dep. Var. ConversionItalySpain
    Log HHI−0.0390***−0.0034***
    (0.0089)(0.0011)
    KP F-test61.61743.5
    Observations9,012,9174,105,317

    • Notes: 2SLS estimates. The dependent variable is a dummy variable equal to one when the individual was hired on a temporary contract at year t and had/started a permanent contract with the same employer in the following calendar year; it is equal to zero otherwise. Local labor markets are defined based on four-digit occupations and functional areas (FAs). Control variables include gender, education (four categories), yearly dummies for workers’ age, whether the individual was employed the year before hiring, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Standard errors are clustered at the labor-market-by-year level. KP F-test: Kleibergen–Paap Wald F-test. *p < 0.1, **p < 0.05, ***p < 0.01. Observations include singletons.

  • Table 8

    Labor Market Concentration and Probability of Being Hired on a Permanent Contract as a Function of Collective Bargaining Coverage—IV Estimates

    Dep. Var. Permanent Contract(1)(2)
    Panel A: Germany
    Log HHI−0.0680***−0.0663***
    (0.0123)(0.0123)
    Log HHI*Coverage share, Sector CBA0.0074
    (0.0057)
    Log HHI*High coverage dummy, Sector CBA−0.0017
    (0.0018)
    KP F-test85.185.1
    Observations4,167,9184,167,918
    Panel B: Portugal
    Log HHI−0.0514*−0.0523*
    (0.0303)(0.0309)
    Log HHI*Coverage share, Sector CBA0.0014
    (0.0061)
    Log HHI*High coverage dummy, Sector CBA0.0030
    (0.0023)
    KP F-test6.76.8
    Observations1,039,7921,039,792

    • Notes: 2SLS estimates. The dependent variable is a dummy variable equal to one if the individual is hired on a permanent contract and zero if hired on a temporary contract. Local labor markets are defined based on four-digit occupations and functional areas (FAs). “Coverage share, Sector CBA” is the proportion of employees covered by a sector-level collective agreement in the industry where the individual is employed. “High coverage dummy, Sector CBA” is a dummy variable equal to one if the individual is employed in an industry with a proportion of employees covered by a sector-level collective agreement above the median, and zero otherwise. Control variables include gender, education (four categories), yearly dummies for workers’ age, whether the individual was employed the year before, whether they work full-time or not, as well as firm-by-municipality-by-year fixed effects, sector and establishment fixed effects (where not collinear with firm-by-municipality fixed effects), and local labor market fixed effects. In Germany, control variables also include the share of employees covered by a works council in the industry interacted with log(HHI). Log(HHI) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation. Log(HHI) interacted with a collective bargaining indicator (respectively the works council variable) is instrumented by the average of the log inverse number of firms with positive hiring in other FAs for the same occupation interacted with the collective bargaining indicator (respectively the works council variable). Standard errors are clustered at the labor-market-by-year level. KP F-test: Kleibergen–Paap Wald F-test. *p < 0.1, **p < 0.05, ***p < 0.01. Observations include singletons.

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Labor Market Concentration, Wages, and Job Security in Europe
Andrea Bassanini, Giulia Bovini, Eve Caroli, Jorge Casanova-Ferrando, Federico Cingano, Paolo Falco, Florentino Felgueroso, Marcel Jansen, Pedro S. Martins, António Melo, Michael Oberfichtner, Martin Popp
Journal of Human Resources May 2026, 61 (3) 817-853; DOI: 10.3368/jhr.0223-12757R1
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