Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314713 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11674
Publisher: 
CESifo GmbH, Munich
Abstract: 
This paper reveals a new determinant of wage markdowns at the firm level, namely, the product scope. Using matched employer-employee data on Danish manufacturing firms, we document a negative elasticity between wages and firm scope, which is of a similar magnitude but opposite sign as the firm-size wage premium. We rationalize the wage discount using a theory where workers value the opportunity to switch product lines as an amenity. Multiproduct firms exercise their monopsony power to offer lower wages. Our findings have important implications for understanding labor market dynamics in times of rising concentration from the contribution of large multiproduct firms.
Subjects: 
multiproduct firms
monopsony power
wages
amenities
labor share
JEL: 
J31
J42
L25
D21
F10
Document Type: 
Working Paper
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