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- Title
Imperfect Competition, Compensating Differentials, and Rent Sharing in the US Labor Market.
- Authors
Lamadon, Thibaut; Mogstad, Magne; Setzler, Bradley
- Abstract
We quantify the importance of imperfect competition in the US labor market by estimating the size of labor market rents earned by American firms and workers. We construct a matched employer-employee panel dataset by combining the universe of US business and worker tax records for the period 2001–2015. Using this panel data, we identify and estimate an equilibrium model of the labor market with two-sided heterogeneity where workers view firms as imperfect substitutes because of heterogeneous preferences over nonwage job characteristics. The model allows us to draw inference about imperfect competition, worker sorting, compensating differentials, and rent sharing. (JEL D24, H24, H25, J22, J24, J31, J42)
- Subjects
IMPERFECT competition; LABOR market; BUSINESS tax; JOB descriptions; PANEL analysis
- Publication
American Economic Review, 2022, Vol 112, Issue 1, p169
- ISSN
0002-8282
- Publication type
Article
- DOI
10.1257/aer.20190790