THE CONCENTRATION-EARNINGS HYPOTHESIS: RECONCILING INDIVIDUAL AND INDUSTRY DATA IN US STUDIES*

The authors provide at least a partial reconciliation of industry and individual level examinations of the influence of concentration on wages. They find that neither aggregation per se nor use of different wage measures accounts for the general failure of industry level studies to confirm a correlation. Instead, the failure results from serious misspecification forced by an incongruence by constructing an industry level data set that eliminates it and by showing that concentration emerges as significant, a result in harmony with most individual level studies. As a consequence, the results of previous industry level studies should be discounted. Copyright 1990 by Blackwell Publishing Ltd

[1]  D. Blanchflower,et al.  Wages and concentration in British manufacturing , 1986 .

[2]  Lawrence M. Kahn.  Union Impact: A Reduced Form Approach , 1977 .

[3]  The effect of discrimination and of industry segmentation on Japanese wage differentials in relation to education , 1986 .

[4]  D. W. Rasmussen,et al.  Human Capital and Inter-Industry Wages in Manufacturing , 1971 .

[5]  James L. Medoff,et al.  Concentration and labor earnings in manufacturing and utilities , 1977 .

[6]  A. Link,et al.  The Impact of Market Structure on Wages, Fringe Benefits, and Turnover , 1983 .

[7]  Pradeep Kumar.  Differentials in Wage Rates of Unskilled Labor in Canadian Manufacturing Industries , 1972 .

[8]  Wesley S Mellow,et al.  Employer Size and Wages , 1982 .

[9]  Brent R. Moulton.  Random group effects and the precision of regression estimates , 1986 .

[10]  Lawrence M. Kahn.  Unionism and Relative Wages: Direct and Indirect Effects , 1979 .

[11]  Jr. John E. Kwoka.  Monopoly, Plant, and Union Effects on Worker Wages , 1983 .

[12]  D. Belman.  Concentration, Unionism, and Labor Earnings: A Sample Selection Approach , 1988 .

[13]  Union Relative Wage Effects: A Survey , 1986 .

[14]  C. Haworth,et al.  Industrial Concentration and Interindustry Wage Determination , 1978 .

[15]  Stanley H. Masters.  An Interindustry Analysis of Wages and Plant Size , 1969 .

[16]  J. Heywood.  Industrial concentration and fringe benefits , 1988 .

[17]  Thomas A. Pugel.  PROFITABILITY, CONCENTRATION AND THE INTERINDUSTRY VARIATION IN WAGES , 1980 .

[18]  J. Heywood.  Labor Quality and the Concentration-Earnings Hypothesis , 1986 .

[19]  Union Relative Wage Effects: A Survey. , 1988 .

[20]  F. Jenny.  Wage Rates, Concentration and Unionization in French Manufacturing Industries , 1978 .