Assessing Labor Market Concentration's Influence on Wages in the Aftermath of Covid-19
Open Access
Author:
Davis, Katelyn
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Ewout Verriest, Thesis Supervisor Nima Haghpanah, Thesis Honors Advisor Bee Yan Roberts, Faculty Reader
Keywords:
labor market concentration labor market monopsony
Abstract:
Research has shown that U.S. labor markets are highly concentrated, threatening the welfare of American workers by lowering wages. Using establishment level data from the U.S. Census Bureau County Business Patterns, this thesis provides the first look at how the Covid-19 pandemic impacted the relationship between labor market concentration and wages in the United States. The analysis focuses on four sectors that were highly impacted by the pandemic: (1) healthcare, (2) food and accommodation, (3) arts, entertainment, and recreation, (4) and retail trade. The econometric model, using a new time period of data, confirms prior findings of a negative relationship between labor market concentration in both the arts, entertainment, and recreation and retail trade sectors. Additional analysis indicates that, in all sectors except healthcare, an increase in HHI further decreased wages in the aftermath of the pandemic. These findings serve as guidance to policy makers, highlighting the impact of the recent shifts in the labor market on workers.
