TY  - RPRT
        AU  - Jarosch, Gregor
AU  - Nimczik, Jan Sebastian
AU  - Sorkin, Isaac
        TI  - Granular Search, Market Structure, and Wages
        PY  - 2019/Aug/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 12574
        UR  - https://www.iza.org/index.php/publications/dp12574
        AB  - We build a model where firm size is a source of labor 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 labor share from 1997 to 2015. Mergers decrease competition for workers and reduce wages even at non-merging firms. 
        KW  - search and matching
KW  - labor share
KW  - market power
        ER  -