Abstract
We analyse the degree of employer market power and labour market concentration in the UK. We investigate the relationship between employer power, labour market institutions, and labour market outcomes. We also assess the impact of four trends driving the changing nature of work that could potentially impact employer market power - working-from-home and hybrid working, the rise of the gig economy, restrictive covenants, and changes in pay-setting policies. We find that in the UK, employer market power and labour market concentration have not increased over the last twenty years, in contrast to the US. Nonetheless, there are large and persistent differences in both measures across regions, occupations, and firms. For affected workers, concentrated labour markets have a very real cost. Comparing similar workers, wages are on average 10% lower in the most concentrated labour markets compared to the least concentrated.
Joel Kariel
Econometrics Adviser
My research interests include firm dynamics, productivity, technological change, market power, applied econometrics.