Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/262396 
Year of Publication: 
2022
Series/Report no.: 
Upjohn Institute Working Paper No. 22-368
Publisher: 
W.E. Upjohn Institute for Employment Research, Kalamazoo, MI
Abstract: 
In this paper, we study the effects of common ownership, the extent to which firms are linked via common owners, on employee earnings in U.S. local labor markets. Between 1999 and 2017, common ownership in local labor markets has more than doubled. Panel regressions show that employee earnings in a local labor market are negatively associated with common ownership. To identify causal effects, we use a firm's addition to the S&P 500 index as a shock to common ownership of its competitors in a local labor market. Using a matched difference-in-differences analysis, we find that, after a firm enters the S&P 500 index, the average annual earnings per employee of its local competitors decreases relative to the counterfactual. The effect of index inclusion shocks on employee earnings is stronger in local labor markets where the shares of S&P 500 incumbents are higher before a shock.
Subjects: 
Monopsony
oligopsony
labor markets
competition policy
common ownership
JEL: 
J42
J31
L40
D40
G34
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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