Welfare

Finance

Statistics

Oligopoly

Accounting

Macroeconomics

Labour economics

Economics

Uncorrelated

Microeconomics

Ecology

Revenue

Productivity

Payroll

Mathematics

Market economy

Monetary economics

Biology

Competition (biology)

American Economic Journal Microeconomics

American industries have grown more concentrated over the last 40 years. In the absence of productivity innovation, this should lead to price hikes and output reductions, decreasing consumer welfare. With US census data from 1972 to 2012, I use price data to disentangle revenue from output. Industry-level estimates show that concentration increases are positively correlated to productivity and real output growth, uncorrelated with price changes and overall payroll, and negatively correlated with labor’s revenue share. I rationalize these results in a simple model of competition. Productive industries (with growing oligopolists) expand real output and hold down prices, raising consumer welfare, while maintaining or reducing their workforces, lowering labor’s share of output. (JEL D43, L13, D24, D33, D21, D42)

Growing Oligopolies, Prices, Output, and Productivity