Impact of Market Concentration on Employment and Wages: a Look at the Insurance Industry

  • Ghanshyam Sharma
  • Kurt W. RotthoffEmail author


The falling share of labor in national income is a global concern. This study examined the impact of changes in market concentration ratios in the insurance industry on employment, the share of wages, sales (premiums), and annual wages. Panel data were analyzed for the period 2001 to 2012 for the life, property, and health insurance industries, available from the Bureau of Economic Analysis, Bureau of Labor Statistics, and SNL Financial Analysis database. Using a fixed effects model, we found that higher market concentration was associated with lower employment in the industry and a lower share of wages. However, there was no statistically significant association between concentration and average annual wage. Moreover, there was evidence that market concentration is positively associated with higher total sales (premiums received by the companies). Thus, we conclude that lower employment is not driven by the poor economic performance of the industry.


Industry concentration Insurance Jobs Share of labor 


L1 J2 J3 



We would like to thank Saicharan Abhishek for helping us with the data. Any mistakes are our own.


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Copyright information

© International Atlantic Economic Society 2019

Authors and Affiliations

  1. 1.Seton Hall UniversitySouth OrangeUSA

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