Concentration in U.S. Local Labor Markets: Evidence from Vacancy and Employment Data
This paper uses comprehensive data on job postings, job creation, and employment to characterize the time-series and cross-sectional properties of local labor market concentration since 1976. We compute Herfindahl-Hirschman Indexes (HHI) at the local labor market level using data on the universe of on-line vacancies (BGT) and the universe of establishments (LBD). We find that: (i) labor market concentration has been decreasing over time, dropping by between 30% and 50% since 1976 in most industries and geographies; (ii) in the last decade, only x% (y%) of U.S. jobs (vacancies) are in moderately concentrated markets; (iii) labor market concentration is associated with a moderate increase in jobs' skill requirements (upskilling) and a limited decrease in average wages (wage compression). Given these empirical patterns, we conclude that the evolution of labor market concentration per se is unlikely to account for a substantial portion of the secular changes in U.S. aggregate wage trends and inequality growth.
LABOR MARKET ISSUES; WORKFORCE DEVELOPMENT; Job skills and standards