Research
Research
Abstract:
Absent exogenous variation, the casual effect of labor market concentration on wages is hard to identify. A quasi-natural experiment rooted in the practice of urban planning of the Soviet Union, however, provides us with such a variation. Soviet planners developed green-field urban satellites and industrial plants hand-in-hand as independent and closed, large, lumpy units. However, sometimes they happened to be spatially close to each other. Today, with labor mobility, such close-by satellites form common labor markets and the number of nearby satellites creates concentration variations in a quasi-random fashion. We find a 10\% increase in the number of firms improves wages by 3.4\%.
Abstract:
This paper studies the distributional consequences of financial crises. We combine long-run macro-financial data from Macrohistory Database with income and wealth inequality data. We show that financial recessions have substantial long-run effects on both income and wealth inequality. Income inequality increases in the long run that can be linked to the labor market dynamic. The effect is particularly strong compared to non-financial recessions. The wealth inequality moves in the opposite direction, with a significant decrease of the top wealth shares in the long run. We also provide evidence that inequality response in the aftermath of the financial crisis of 2008 was atypical, without any significant movement in inequality measures.
Abstract:
The paper links decreasing labor mobility and state-to-state migration to an increase in labor market concentration and a national-wide presence of top employers. With the IRS migration data and the BDS data on firms, I show that the decrease in labor mobility over the last decades can be explained by the change in concentration composition of local labor markets. With a theoretical model, I show that this link can be explained by wage-setting power of big firms, which decreases an outside option for job-seekers and thus lowers incentives for labor mobility.