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• W4324370060 abstract "We propose a model of strategic delegation in professional labor markets in which big and fringe firms compete for heterogeneous workers. In this context, big firms decide whether to exercise their market power to suppress wages (wage suppression) or to delegate hiring to divisions, thereby committing to bidding more fiercely for more skilled workers (talent acquisition). This reduces the incentive for other firms to go toe-to-toe with the decentralizing firm. In equilibrium, a big firm commanding labor market power opts for either of these two strategies. We find that the presence of a big firm in the labor market is detrimental to social welfare only if its size exceeds the tipping point beyond which it ceases to decentralize. Moreover, our model is compatible with recent studies that negatively link labor market concentration and labor share. Finally, the introduction of a wage floor encourages the big firm to decentralize, increasing match quality, such that social welfare may increase despite a drop in employment." @default.
• W4324370060 created "2023-03-16" @default.
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• W4324370060 date "2023-04-01" @default.
• W4324370060 modified "2023-09-25" @default.
• W4324370060 title "The strategic decentralization of recruiting" @default.
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• W4324370060 doi "https://doi.org/10.1016/j.jet.2023.105639" @default.
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