- Title
- Granular Search, Market Structure, and Wages
- Author(s)
- Gregor Jarosch Gregor Jarosch (Princeton University and NBER)
- Jan Sebastian Nimczik Jan Nimczik (ESMT Berlin and IZA)
- Isaac Sorkin Isaac Sorkin (Stanford University and NBER)
- Abstract
- We develop a model where labor market structure affects the division of surplus between firms and workers. In a model of random search and large employers, workers might apply to another job controlled by the same employer in the future. This possibility endows firms with size-based market power. The reason is that outside options are truly outside the firm: firms do not compete with their own vacancies. Hence, a worker’s outside option is worse when bargaining with a larger firm, and wages depend on market structure. We calibrate the model to Austrian data and find that such size-based market power depresses wages.
- Creation Date
- 2021-07
- Section URL ID
- Paper Number
- 2021-38
- URL
- https://drive.google.com/file/d/18VDO4GcvZZdJbnv4pf_jNargum4rJAuR/view
- File Function
- Jel
- E20, J01
- Keyword(s)
- labor market, labor economics
- Suppress
- false
- Series
- 13