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dc.titleIdentifying Labor Market Power: A Quasi-Experimental Approach
dc.contributor.authorGalindo da Fonseca, João
dc.contributor.authorSantarrosa, Rogerio
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageBrazil
dc.date.available2025-04-04T00:04:00
dc.date.issue2025-04-04T00:04:00
dc.description.abstractWe test whether firms react to changes in the wages and size of their competitors. We use a unique institutional feature of public procurement auctions in Brazil: the moment in which the auction ends is random. For close auctions, winner and runner-up are as good as randomly assigned. We first show that firm-specific demand shocks lead to increases in the size and wages of the firm receiving the shock. Then, we document that these firm-specific demand shocks lead to increased wages of other (competing) firms in the same local labor market. We do not find negative effects on competitors' firm size. The effects are driven by competing firms responding to demand shocks from firms with high labor market share.
dc.format.extent39
dc.identifier.doihttp://dx.doi.org/10.18235/0013485
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Identifying-Labor-Market-Power-A-Quasi-Experimental-Approach.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectLabor Market
dc.subjectSmall Business
dc.subjectAuction
dc.subjectWage
dc.subjectLabor Force
dc.subjectLabor
dc.subjectDemand Shock
dc.subjectForest Resource
dc.subjectWorkforce and Employment
dc.subject.jelcodeJ01 - Labor Economics: General
dc.subject.jelcodeJ23 - Labor Demand
dc.subject.jelcodeJ30 - Wages, Compensation, and Labor Costs: General
idb.identifier.pubnumberIDB-WP-01681
idb.operationRG-K1198
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