Empirical Essays on Labor Market Power and Work Quality

Abstract

Employer monopsony power is increasingly viewed as an important feature of U.S. labor markets. This dissertation adds timely empirical evidence to ongoing debates about the effects of various sources of monopsony power, such as labor market concentration and noncompete agreements. Chapter One analyzes the effects of labor market concentration on occupational safety, a principal dimension of working conditions. This chapter utilizes establishment-level workplace safety data and occupation- and industry-based measures of local labor market concentration. I also exploit changes in local labor market concentration due to merger and acquisition activity in a quasi-experimental difference-in-differences design. Overall, my results suggest that greater labor market concentration increases the health and safety risks that workers face on the job. I discuss the policy implications of these findings for workplace safety regulation and antitrust enforcement. Chapter Two investigates the interaction between labor market concentration and noncompete agreements. This analysis is the first to connect high-quality concentration data to nationally representative U.S. labor market data that includes individual noncompete agreement status. I find that noncompetes are marginally more common in competitive labor markets, though there are still meaningful rates of noncompetes in concentrated markets. Moreover, the additional compensation that workers receive for noncompete agreements is substantially smaller in concentrated markets. These wage results are robust across several different demographic subsamples. The modulating effect of labor market concentration on noncompete agreement outcomes has implications for efficient noncompete regulation. Chapter Three explores a previously unquantified relationship between noncompete agreements and union membership. Despite their long-run institutional decline, unions remain an important determinant of work quality. My empirical strategy primarily leverages a 2008 Oregon law that restricted the enforcement of noncompete agreements against hourly workers. I find the probability of union membership increases when noncompetes become more difficult to enforce.