Imperfect Competition and Rents in Labor and Product Markets: The Case of the Construction Industry

• 成果类型: Article
• 署名作者: Kroft, Kory; Luo, Yao; Mogstad, Magne; Setzler, Bradley
• 署名单位: University of Toronto; National Bureau of Economic Research; University of Chicago; Statistics Norway; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20220577
• 发表日期: 2025
• 页码: 2926-2969
• 关键词: Monopsony; auctions; rise

摘要

We develop, identify, and estimate a model of imperfect competition in both labor and product markets. Our context is the US construction industry, where firms compete for workers, private market projects, and government procurements. Our empirical approach leverages bidding data from procurement auctions linked to employer-employee tax records. We find imperfect competition in both markets generates a total wage markdown of more than 30 percent and a total price markup of around 45 percent. By contrast, if one erroneously assumed a perfectly competitive product (labor) market, then one would conclude wages (prices) are marked down (up) by only 20 percent (16 percent). (JEL D21, D24, H76, J31, L13, L74)