In new research, Sabien Dobbelaere, Grace McCormack, Daniel Prinz, and Sándor Sóvágó find that mergers negatively impact labor market outcomes. Mergers result in job losses, and the earnings of workers who lose their jobs don’t recover for several years on average. The authors find these negative consequences are more likely attributable to the restructuring of labor forces than subsequent firm market power.
Do labor markets in Europe or the United States and Canada experience more monopsony power? In a new paper published in the University of Chicago Law Review, Satoshi Araki, Andrea Bassanini, Andrew Green, Luca Marcolin, and Cristina Volpin provide comparisons of monopsony power between the two regions, documenting similar levels of concentration across labor markets despite generally stronger protections in Europe. They also discuss the effects of such concentration on employment and wages, ending with potential regulatory reforms to address these issues.
American antitrust regulators have recently taken aim at noncompete clauses. They argue that noncompetes suppress labor bargaining power and thus wages. The Italian labor market differs from its American counterpart in its rigid protections for labor, but the use of noncompetes in Italy occur at about the same rate as in the United States and shows a correlation with lower wages for workers whose noncompete clauses are unjustified because their jobs require little training and do not grant access to trade secrets. The evidence from Italy suggests that better regulation of noncompetes and informing workers of their rights is justified on the whole.
In two recent papers, Matthew E. Kahn and Joseph Tracy examine the outcomes of local labor markets affected by monopsony power. They find that in areas with a high degree of monopsony power, workers earn lower wages but are compensated with lower house prices, at the expense of homeowners. Monopsony markets also experience a “brain drain” over time due to young, educated workers who leave for better opportunities. The rise of work-from-home may accelerate this dynamic by allowing talent to change labor markets without changing residences.
Drawing on the theory of Albert O. Hirschman’s Exit, Voice, and Loyalty, Brian Callaci argues non-compete clauses stifle the important channels of communication between employees and businesses necessary for improving firm competitiveness. The evidence also shows that, despite claims from businesses, non-competes harm rather than reward employees for their loyalty.
A new empirical study examines whether advancements in automation and robotics have affected intergenerational income mobility. The authors find that parents’ exposure...
Decades of progress have seen greater opportunities for women in the workplace, but sizable gender gaps still remain. Stefania Albanesi, Claudia Olivetti...
In a new paper, Bing Guo, Dennis C. Hutschenreiter, David Pérez-Castrillo, and Anna Toldrà-Simats study how large institutional investors impact firm innovation. The authors find that large institutional investors encourage internal research and development but discourage firm acquisitions that would add patents and knowledge to their firms’ portfolios, hampering overall innovation.
Joshua Gray and Cristian Santesteban argue that the Federal Trade Commission's focus in Meta-Within and Microsoft-Activision on narrow markets like VR fitness apps and consoles missed the boat on the real competition issue: the threat to future competition in nascent markets like VR platforms and cloud gaming.
Antitrust debates have largely ignored questions about the relationship between market power and productivity, and scholars have provided little guidance on the issue due to data limitations. However, data is plentiful on the hospital industry for both market power and operating costs and productivity, and researchers need to take advantage, writes David Ennis.
Meta has silenced news organizations’ social media accounts in response to Canada’s Online News Act, a law not yet in effect. Josh Braun describes the reasoning behind such legislation, its potential flaws, and how Meta, particularly Facebook, has turned the Canadian wildfire crisis into a regulatory pressure campaign.
To support the Agencies’ goals of stronger antitrust enforcement, Fiona Scott Morton recommends breaking the draft Merger Guidelines into three documents that clarify the Guidelines’ legal and economic justifications and overarching goals and priorities.