RDP 2023-02: Did Labour Market Concentration Lower Wages Growth Pre-COVID? Appendix B: Regression robustness results

Jonathan Hambur

March 2023

Table B1: Fixed effects – Local market model
  Headcount Wages
  None Local Time trends None Local Time trends
Concentration (HHI) −0.162***
(0.012)		 −0.153***
−0.015		 −0.122***
(0.014)		 −0.238***
(0.012)		 −0.359***
(0.015)		 −0.311*** −0.025
Productivity 0.175***
(0.002)		 0.087***
(0.002)		 0.077***
(0.002)		 0.174***
(0.004)		 0.085***
(0.002)		 0.075***
(0.002)
R2 0.107 0.631 0.671 0.110 0.633 0.672
N 306,000 302,000 302,000 306,000 302,000 302,000
Fixed effects
Local market N Y Y N Y Y
Time*Industry N N Y N N Y
Time*Location N N Y N N Y
Note: All regressions include a set of common controls covering market characteristics (number of workers in the market). Errors clusters at the local market level.
Table B2: Fixed effects – Rent-sharing model plant-level
  Headcount
  None Local Ind area time Plant Local time All
Productivity 0.371***
(0.005)		 0.318***
(0.05)		 0.316***
(0.05)		 0.164***
(0.004)		 0.324***
(0.05)		 0.170***
(0.05)
Local Concentration (HHI)* Productivity −0.207***
(0.016)		 −0.233***
(0.014)		 −0.239***
(0.015)		 −0.122***
(0.011)		 −0.286***
(0.017)		 −0.174***
(0.017)
Firm Concentration (HHI)* Productivity −0.121***
(0.010)		 −0.201***
(0.008)		 −0.203***
(0.008)		 −0.008
(0.007)		 −0.322***
(0.010)		 −0.322***
(0.010)
R2 0.211 0.326 0.344 0.781 0.367 0.797
N 3,970,000 3,970,000 3,970,000 3,660,000 3,860,000 3,560,000
Fixed effects
Local market N Y Y Y Y Y
Time*Industry N N Y Y N Y
Time*Location N N Y Y N Y
Time*Market N N N N Y Y
Plant N N N Y N Y
Note: All regressions include a set of common controls covering market characteristics (number of workers in the market). Errors clusters at the local market level.
Table B3: Differing coverage – Local market model
  Headcount
  Baseline No small markets
(<10 plants)		 Lagged HHI No rural No primary industries
Concentration (HHI) −0.122***
(0.014)		 −0.135***
−0.028		 −0.087***
(0.013)		 −0.131***
(0.015)		 −0.144***
(0.016)
Productivity 0.077***
(0.002)		 0.031***
(0.002)		 0.077***
(0.002)		 0.076***
(0.002)		 0.073***
(0.002)
R2 0.670 0.856 0.67 0.670 0.655
N 302,000 117,000 302,000 277,000 261,000
Fixed effects
Local market Y Y Y Y Y
Time*Industry Y Y Y Y Y
Time*Location Y Y Y Y Y
Note: All regressions include a set of common controls covering market characteristics (number of workers in the market). Errors clusters at the local market level.
Table B4: Differing concentration metrics – Local market model
  Headcount
  Baseline Top 4 share Top 10 share Log HHI
Concentration (HHI) −0.122***
(0.014)		 −0.122***
(0.018)		 0.014
(0.026)		 −0.146***
(0.005)
Productivity 0.077***
(0.002)		 0.078***
(0.002)		 0.077***
(0.002)		 0.077***
(0.002)
R2 0.670 0.670 0.670 0.670
N 302,000 302,000 302,000 277,000
Fixed effects
Local market Y Y Y Y
Time*Industry Y Y Y Y
Time*Location Y Y Y Y
Note: All regressions include a set of common controls covering market characteristics (number of workers in the market. Errors clusters at the local market level.
Table B5: Differing market definitions – Local market model
  Headcount
Industry/occupation ANZSIC 3-digit ANZSIC 2-digit ANZSIC 3-digit ANZSIC 2-digt and ANZSCO 2 digit
Location Working Zone Working Zone SA4/Greater capital area Working Zone
Concentration (HHI) −0.122***
(0.014)		 −0.115***
(0.020)		 −0.073***
(0.033)		 −0.810***
(0.025)
Productivity 0.077***
(0.002)		 0.064***
(0.002)		 0.049***
(0.003)		 0.062***
(0.002)
R2 0.670 0.677 0.779 0.672
N 302,000 165,000 91,000 1,740,000
Fixed effects
Local market Y Y Y Y
Time*Industry Y Y Y Y
Time*Location Y Y Y Y
Note: All regressions include a set of common controls covering market characteristics (number of workers in the market. Errors clusters at the local market level.
Table B6: Wages models
  Local Labour Market models Plant-level model
  Labour market Labour market -Over time Plant monopsony Plant oligopsony Plant rent-sharing
Market Concentration (HHI) −0.311***
(0.008)		 −0.246***
(0.023)		 −0.279***
(0.011)		    
Market Concentration GFC (HHI)   −0.085***
(0.021)		      
Market Concentration post GFC (HHI)   −0.094***
(0.021)		      
Local Concentration – (plant share)       3.300***
(0.032)		  
Local Concentration (plant share)* Productivity         −0.117***
(0.015)
Firm Concentration (plant share)* Productivity         −0.259***
(0.01)
R2 0.672 0.67 0.781 0.801 0.802
N 302,000 302,000 3,660,000 3,560,000 3,560,000
Fixed effects
Local market Y Y Y N N
Time*Industry Y N Y N N
Time*Location Y Y Y N N
Time*market N N N Y Y
Plant N N Y Y Y
Note: All regressions include a set of common controls covering market characteristics (number of workers in the market) Plant-level model contain control for number of plants in parent firm. Errors clusters at the local market level.
Table B7: Firm entry, concentration and wages specification
  Entry models Union models (2005-2013)
  Baseline Plant-based entry rate Firm-based entry rate Baseline Union
Concentration −0.122***
−0.008		 −0.110***
−0.016		 −0.111***
−0.015		 −0.315***
(0.016)		 −0.322***
(0.016)
Concentration * Entry Rate   0.540***
−0.204		 0.800***
−0.228		    
Concentration * Union         0.010**
(0.003)
R2 0.67 0.683 0.686 0.985 0.701
N 302,000 274,000 274,000 247,000 217,000
Fixed effects
Local market Y Y Y Y Y
Time*Industry Y Y Y Y Y
Time*Location Y Y Y Y Y
Note: All regressions include a set of common controls covering market characteristics (number of workers in the market) Plant-level model contain control for number of plants in parent firm. Errors clusters at the local market level.