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Publication Date



Upjohn Institute working paper ; 22-368




In this paper, we study common ownership in U.S. labor markets, and document that common ownership more than doubled over the period 1999–2017. To identify the causal effects of common ownership on labor market outcomes, we use a firm’s addition to the S&P 500 index as a shock to the common ownership of its competitors in local labor markets. Using a matched difference-in-differences analysis, we find that, after a firm enters the S&P 500 index, the average annual earnings per employee of its local competitors decrease relative to the counterfactual. The effect of S&P 500 index additions on employee earnings is stronger in local labor markets where the employment shares of S&P 500 firms were higher or union coverage rates were lower ex ante. The effect is not driven by changes in workforce characteristics. We also find that an increase in common ownership leads to higher separation rates in treated local labor markets. Perhaps surprisingly, it increases their hiring rates even more, resulting in an overall positive effect on total employment. While together these facts are inconsistent with the canonical oligopsony model, we show that they can be rationalized in a generalized model of oligopsony with a recruitment intensity decision by firms.

Issue Date

July 2022


Upjohn project #69115

Subject Areas

LABOR MARKET ISSUES; Wages, health insurance and other benefits


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Azar, José, Yue Qiu, and Aaron Sojourner. 2022. "Common Ownership in Labor Markets." Upjohn Institute Working Paper 22-368. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. https://doi.org/10.17848/wp22-368