Centre for Finance, Credit and Macroeconomics (CFCM)

*Cancelled* CFCM Seminar: Gregor Jarosch (Princeton University)

Location
A39 Sir Clive Granger Building
Date(s)
Thursday 26th March 2020 (14:00-15:00)
Description

Granular search, market structure and wages (with Jan Sebastian and Nimczik Isaac Sorkin)

Abstract: We build a model where firm size is a source of labour market power. The key mechanism is that a granular employer can eliminate its own vacancies from a worker’s outside option in the wage bargain. Hence, a granular employer does not compete with itself. We show how wages depend on employment concentration and then use the model to quantify the effects of granular market power. In Austrian micro-data, we find that granular market power depresses wages by about ten percent and can explain 40 percent of the observed decline in the labour share from 1997 to 2015. Mergers decrease competition for workers and reduce wages even at non-merging firms.

 

Centre for Finance, Credit and Macroeconomics

Sir Clive Granger Building
University of Nottingham
University Park
Nottingham, NG7 2RD

Enquiries: hilary.hughes@nottingham.ac.uk