Working Papers

This paper examines trends in worker bargaining power in the United States and France. I find that bargaining power has shifted in favor of firms over the last decades, with a consistent trend observed in both countries. These patterns help explain recent dynamics of unemployment and wage growth uncovering that firms leveraged their negotiation position to hire an inefficiently high number of employees. I propose marginal wage and profit taxes to restore labor market efficiency. Factors such as technological evolution, regulatory measures, trade, and outsourcing appear to exert minimal impact on bargaining power reduction. However, gender and occupation disparities are pivotal, with male and non-routine workers experiencing the most pronounced reduction in bargaining power. 

We propose a method that generates unbiased and consistent markup estimates using only revenue data. Building on standard production function estimators, our method requires flexibly modeling markups as a specified function of observables and fixed effects and modifying physical productivity process assumptions into revenue productivity process assumptions. We show that it solves the omitted price bias without imposing additional assumptions on the demand side or the competition structure. Our suggested two-step estimator is simple in concept and implementation, requiring only common regression techniques and information available in most data settings.

Can mergers and acquisitions (M&A) explain recent trends in rising market power? While existing literature primarily focuses on the direct effects of mergers on acquirer markups, we propose a novel approach by examining the impact of M&A through the lens of revenue transfers. We introduce a unique methodology to quantify such transfers, revealing how they significantly shape industry composition and market power. Our analysis indicates that M&A activities, often involving substantial revenue shifts, play a crucial role in the rise of aggregate markups, explaining all of the increase in concentration and accounting for 40-80% of the markup rise. These findings offer new insights into the factors driving market power trends, emphasizing the need to consider broader revenue implications of M&As. 

What is driving the decline in labor force participation in the United States over the past six decades? This paper investigates the role of worker bargaining power in this phenomenon. Motivated by a strong correlation in their trends, I leverage the staggered introduction of right-to-work laws across states to identify a causal link between lower worker bargaining power and a decline in labor force participation. Specifically, I construct a time series of worker bargaining power at the state level and find that lower worker bargaining power is associated with a decrease in labor force participation. To better understand the mechanisms at play, I develop a model with endogenous participation choices and show that worker bargaining power can account for a significant share of the decline in labor force participation rate, employment, and labor share in recent years. These findings suggest that policies aimed to strengthen worker bargaining power could help boost labor force participation in the United States.

Selected Work in Progress

Resisting Creative Destruction: Industry Dynamics with Dominant Firms

with Elie Gerschel and Julian Schärer, August 2023.

Markups: Theory Does Not Meet Data

Non-Refereed Publications

Structural Reforms in Transportations: Dynamics and Sectorial Spillover 

How Can We Boost Competition in the Services Sector?, pp. 134-169. Nomos Verlagsgesellschaft mbH & Co. KG, 2018.