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The Impact of Concentration on Wages in the Sectors of Mining and Manufacturing of West German Industry*

Published online by Cambridge University Press:  17 August 2016

B. Feldmann
B. Feldmann*
Affiliation:
Universität Hamburg
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Extract

Assuming a certain extend of labour immobility between different industrial sectors, this paper shall test empirically the effect of monopoly power on labour earnings in 40 West German industries.

This investigation has been done before by several authors for different countries, but so far only one empirical analysis exists for West Germany, where a negative effect of firms’ concentration on wages was found. This is rather surprising, considering the opposite findings for the USA, the UK, France, Belgium and Italy, where in all cases positive relationships between firms’ concentration and wages have been revealed. Therefore another test for West Germany seems justified.

In general, the analysis of links between monopoly power and labour income contributes to the research in welfare loss through monopolization, since any empirical measure of this welfare loss is understated if some fraction of monopoly profit is transferred to labour.

Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 47 , Issue 3-4 , September 1981 , pp. 335 - 355
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1981 

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Footnotes

*

I am grateful for comments on previous drafts to professor Keith Cowling at Warwick University and to the participants of the EARIE conference in Basel in September 1981. Any remaining errors are of course my own.

References

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