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Research ArticleArticle
Open Access

Labor Market Concentration

José Azar, Ioana Marinescu and Marshall Steinbaum
Published online before print May 12, 2020, 1218-9914R1; DOI: https://doi.org/10.3368/jhr.monopsony.1218-9914R1
José Azar
Azar: Assistant Professor at the University of Navarra’s Business and Economics Department and a Visiting Assistant Professor and Ressearch Associate at Unversity of Navarra’s IESE Business School IESE Business School, Av Pearson, 21, 08034 Barcelona, Spain. CEPR Associate. . Marinescu: Assistant Professor at University of Pennsylvania School of Social Policy & Practice, 3701 Locust Walk, Philadelphia PA, 19104-6214, . NBER Faculty Researh Fellow. Steinbaum: Assistant Professor at University of Utah Economics Department, 260 Central Campus Dr 4100, Salt Lake City, UT 84112.
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Ioana Marinescu
Azar: Assistant Professor at the University of Navarra’s Business and Economics Department and a Visiting Assistant Professor and Ressearch Associate at Unversity of Navarra’s IESE Business School IESE Business School, Av Pearson, 21, 08034 Barcelona, Spain. CEPR Associate. . Marinescu: Assistant Professor at University of Pennsylvania School of Social Policy & Practice, 3701 Locust Walk, Philadelphia PA, 19104-6214, . NBER Faculty Researh Fellow. Steinbaum: Assistant Professor at University of Utah Economics Department, 260 Central Campus Dr 4100, Salt Lake City, UT 84112.
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Marshall Steinbaum
Azar: Assistant Professor at the University of Navarra’s Business and Economics Department and a Visiting Assistant Professor and Ressearch Associate at Unversity of Navarra’s IESE Business School IESE Business School, Av Pearson, 21, 08034 Barcelona, Spain. CEPR Associate. . Marinescu: Assistant Professor at University of Pennsylvania School of Social Policy & Practice, 3701 Locust Walk, Philadelphia PA, 19104-6214, . NBER Faculty Researh Fellow. Steinbaum: Assistant Professor at University of Utah Economics Department, 260 Central Campus Dr 4100, Salt Lake City, UT 84112.
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Abstract

A product market is concentrated when a few firms dominate the market. Similarly, a labor market is concentrated when a few firms dominate hiring in the market. Using data from the leading employment website CareerBuilder.com, we calculate labor market concentration for over 8,000 geographic-occupational labor markets in the US. Based on the DOJ-FTC horizontal merger guidelines, the average market is highly concentrated. Going from the 25th percentile to the 75th percentile in concentration is associated with a 5% (OLS) to 17% (IV) decline in posted wages, suggesting that concentration increases labor market power.

Keywords
  • Monopsony
  • Oligopsony
  • Labor Markets
  • Competition Policy

This open access article is distributed under the terms of the CC-BY- NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0) and is freely available online at: http://jhr.uwpress.org

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Journal of Human Resources: 60 (3)
Journal of Human Resources
Vol. 60, Issue 3
1 May 2025
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Labor Market Concentration
José Azar, Ioana Marinescu, Marshall Steinbaum
Journal of Human Resources May 2020, 1218-9914R1; DOI: 10.3368/jhr.monopsony.1218-9914R1

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Labor Market Concentration
José Azar, Ioana Marinescu, Marshall Steinbaum
Journal of Human Resources May 2020, 1218-9914R1; DOI: 10.3368/jhr.monopsony.1218-9914R1
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Keywords

  • monopsony
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