Labor-Market Concentration and Labor Compensation

This article estimates the effect of labor-market concentration on labor compensation across the US private sector since 2000. The authors distinguish between concentration in local labor markets and local product markets while guarding against bias from confounded product-market concentration. The analysis extends beyond wages to rates of employment-based health insurance coverage. Reported results suggest negative effects of labor-market concentration on labor compensation. These effects are exacerbated when product-market concentration is higher or when workers are older.