Data and Code for: Imperfect Competition and Rents in Labor and Product Markets: The Case of the Construction Industry

We develop, identify, and estimate a model of imperfect competition in both labor and product markets. Our context is the US construction industry, where firms compete for workers, private market projects, and government procurements. Our empirical approach leverages bidding data from procurement auctions linked to employer-employee tax records. We find that imperfect competition in both markets generates a total wage markdown of more than 30% and a total price markup of around 45%. By contrast, if one erroneously assumed a perfectly competitive product (labor) market, then one would conclude that wages (prices) are marked down (up) by only 20% (16%).