Deb, Shubhdeep and Eeckhout, Jan and Patel, Aseem and Warren, Lawrence (2024) Walras–Bowley Lecture: Market Power and Wage Inequality. Econometrica, 92 (3). pp. 603-636. DOI https://doi.org/10.3982/ECTA21157
Deb, Shubhdeep and Eeckhout, Jan and Patel, Aseem and Warren, Lawrence (2024) Walras–Bowley Lecture: Market Power and Wage Inequality. Econometrica, 92 (3). pp. 603-636. DOI https://doi.org/10.3982/ECTA21157
Deb, Shubhdeep and Eeckhout, Jan and Patel, Aseem and Warren, Lawrence (2024) Walras–Bowley Lecture: Market Power and Wage Inequality. Econometrica, 92 (3). pp. 603-636. DOI https://doi.org/10.3982/ECTA21157
Abstract
We propose a theory of how market power affects wage inequality. We ask how goods and labor market power jointly determine the level of wages, the Skill Premium, and wage inequality. We then use detailed microdata from the US Census Bureau between 1997 and 2016 to estimate the parameters of labor supply, technology and the market structure. We find that a less competitive market structure lowers the average wage of high-skilled workers by 11.3%, and of low-skilled workers by 12.2%, contributes 8.1% to the rise in the Skill Premium and accounts for 54.8% of the increase in between-establishment wage variance.
Item Type: | Article |
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Uncontrolled Keywords: | Market Power. Wage Inequality. Skill Premium. Technological Change. Market Structure. Endogenous Markups. Endogenous Markdowns. |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 16 Feb 2024 13:04 |
Last Modified: | 30 Oct 2024 21:08 |
URI: | http://repository.essex.ac.uk/id/eprint/37788 |
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