Working Paper
Using the near universe of online job postings from 2007 to 2021, the authors construct a firm-level metric of labor market power. They find that firms with higher labor market power tend to have higher financial leverage.
Their findings are not driven by product market competition or correlated labor market characteristics. They are less pronounced among firms hiring in occupations with high labor mobility and skill transferability.
To establish causality, the authors exploit the establishment of Amazon HQ2 in Crystal City as a shock to the labor market power of local firms and show consistent findings with our baseline results.
Faculty
Professor of Finance
