Does Employer Concentration Reduce Labor Force Participation?

The brief’s key findings are:

• The labor force participation of prime-age workers has been declining steadily in recent decades.
• One reason may be the growing concentration of employers in local labor markets, which can lower wages by reducing competition for workers.
• The analysis finds that, indeed, markets with higher employer concentration are more likely to have lower labor force participation rates.
• The results also show that when workers have their own bargaining power through unions to counteract employer concentration, this relationship is weaker.