Browsing by Subject "grocery retail"

This thesis investigates the relationship between local labour market concentration and wages in the Finnish grocery retail industry. Specifically, labour market concentration is estimated by calculating a Herfindahl-Hirschman index based on the grocery retail employment shares between firms within commuting areas using employer-employee data from the Statistics Finland Harmonized structure of earnings survey. With this approach, the thesis attempts to estimate whether local differences in market concentration affect the wages of grocery retail sales workers, contributing to a broader understanding of the implications of the Finnish grocery oligopsony beyond the consumer market. Contrary to what is typically found in the international literature, the results reveal no statistically significant relationship or observable correlation between local labour market concentration and wages despite the high levels of concentration in Finnish grocery retailing. This could be due to the strong collective bargaining system between employer and employee unions in Finland, which greatly limits the downwards elasticity of retail sector wages and could therefore act as a mitigating factor against employer wage-setting power. However, the reliability of these conclusions is limited by changes and inconsistencies in industry and occupation classifications across the study period, sampling differences between observation years, and the inability to recognize which firms belong to the same retail group. There seems to be a growing interest in labour market monopsony from both competition policy and labour market research perspectives due to its potentially wide-ranging implications on wage determination, income inequality, and employment. Future research in Finland could, for example, seek to compare exposure to market concentration between different demographics of employees, use a more refined definition of relevant labour markets, such as task- or skills-based approach, investigate the interaction between collective bargaining agreements and monopsony power at a cross-industry level, and explore potential effects on non-wage outcomes that influence employee welfare.