TY - JOUR
T1 - Employer Consolidation and Wages
T2 - Evidence from Hospitals
AU - Prager, Elena
AU - Schmitt, Matt
N1 - Publisher Copyright:
© 2021 American Economic Association. All rights reserved.
PY - 2021/2
Y1 - 2021/2
N2 - We test whether wage growth slows following employer consolidation by examining hospital mergers. We find evidence of reduced wage growth in cases where both (i) the increase in concentration induced by the merger is large and (ii) workers’skills are industry-specific. In all other cases, we fail to reject zero wage effects. We consider alternative explanations and find that the observed patterns are unlikely to be explained by merger-related changes besides labor market power. Wage growth slowdowns are attenuated in markets with strong labor unions, and wage growth does not decline after out-of-market mergers that leave local employer concentration unchanged.
AB - We test whether wage growth slows following employer consolidation by examining hospital mergers. We find evidence of reduced wage growth in cases where both (i) the increase in concentration induced by the merger is large and (ii) workers’skills are industry-specific. In all other cases, we fail to reject zero wage effects. We consider alternative explanations and find that the observed patterns are unlikely to be explained by merger-related changes besides labor market power. Wage growth slowdowns are attenuated in markets with strong labor unions, and wage growth does not decline after out-of-market mergers that leave local employer concentration unchanged.
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U2 - 10.1257/AER.20190690
DO - 10.1257/AER.20190690
M3 - Article
AN - SCOPUS:85101185693
VL - 111
SP - 397
EP - 427
JO - American Economic Review
JF - American Economic Review
SN - 0002-8282
IS - 2
ER -