产品市场垄断与劳动力市场垄断（英）

Policy Research Working Paper10388Product Market Monopolies and Labor Market MonopsoniesMassimiliano CalìGiorgio PresidenteMacroeconomics, Trade and Investment Global Practice March 2023 Public Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure Authorized Produced by the Research Support TeamAbstractThe Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.Policy Research Working Paper 10388This paper unveils a novel externality of product market regulation in the labor market. It shows theoretically and empirically that higher barriers to entry in product mar-kets translate into higher employers’ labor market power, measured by the wage markdown—the ratio between the marginal product of labor and the wage. The litera-ture suggests that this wedge can distort factor allocation, resulting in lower aggregate output and employment, but also in higher inequality through a reduction in the labor share of national output. Using variation in investment restrictions across 346 manufacturing product markets in Indonesia, the analysis finds that wage markdowns increase by 25 percent in product markets that become subject to investment restrictions. The result is rationalized using a simple oligopsony model in which higher entry costs reduce the equilibrium number of firms, thereby limiting employment options for workers and, hence, their labor market power. Instrumental variable estimates support the model’s prediction that lower entry is the main driver of the positive relationship between investment restrictions and wage markdowns.This paper is a product of the Macroeconomics, Trade and Investment Global Practice. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp. The authors may be contacted at mcali@worldbank.org and giorgio.presidente@oxfordmartin.ox.ac.uk. Product Market Monopolies and Labor MarketMonopsoniesMassimiliano Calì∗1 and Giorgio Presidente†21World Bank2Oxford Martin School, University of OxfordKeywords:product market regulation; labor market power; markdown; firm entry;minimum wageJEL classification:J31; J38; J42; L13; L4∗The authors thank Aufa Doarest, Bob Rijkers and Romàn David Zàrate for helpful comments.Presidente thanks Citi for generous financial support. The views expressed in this paper are of theauthors and do not necessarily reflect those of the affiliating institutions.†Corresponding author: giorgio.presidente@oxfordmartin.ox.ac.uk 1 IntroductionLabor market power is an increasingly important source of market distortions in moderneconomies (Yeh et al., 2022; Benmelech et al., 2022; Mertens, 2022), as it typically allowsfirms to pay a wage below the marginal product of labor.1The wedge between wagesand the marginal product of labor has important economic implications. By departingfrom allocative efficiency, labor market power reduces the economy’s overall output andemployment.2By depressing employment and wages, market power can also reduce thelabor share of national output (Naidu et al., 2018; Brooks et al., 2021; Mertens, 2022), akey measure of inequality that has been declining in most of the world (e.g. Autor et al.,2020; Brooks et al., 2021; Gutiérrez and Philippon, 2017; Karabarbounis and Neiman,2014; De Loecker and Eeckhout, 2018).Understanding the determinants of labor market power is thus crucial to address itspotentially distortionary effects. The literature has posited a positive relation betweenlabor market concentration and employers’ market power, which is consistent with wagesbeing lower in more concentrated labor markets (Amodio et al., 2022; Benmelech et al.,2022). On the basis of this intuitive relationship, some authors have proposed to extendantitrust approaches used to regulate product markets to regulate labor markets (Naiduet al., 2018; Marinescu et al., 2021). However systematic evidence of a causal relationbetween market concentration and labor market power remains elusive.This paper starts to fill this gap by studying how changes in regulatory barriers toentry affect firms’ labor market power. To guide the empirical analysis, we build a simpl