Common Ownership Reduces Wages and Employment

Common Ownership Reduces Wages and Employment

 

José Azar

University of Navarra, IESE Business School; CEPR

Yue Qiu

Temple University

Aaron Sojourner

University of Minnesota; IZA Institute of Labor Economics

 

Abstract

In this study, we examine the effects of common ownership on labor market outcomes. We find that an increase in common ownership in a labor market is associated with decreases in both wages per employee and the employment-to-population ratio. We conduct an event study based on the acquisition of Barclays Global Investors by BlackRock in 2009. Using a synthetic control method, we find that markets that were more affected by the acquisition experienced post-acquisition decreases in annual wages per employee and employment-to-population ratio relative to the counterfactual of no acquisition. The estimated treatment effects of the acquisition were stronger in markets with higher unemployment rates, lower personal income per capita, lower population density, and stricter enforcement of noncompete clauses.