Labor market power and worker turnover

The last two decades have seen a significant decrease in labor market turnover and an increase in labor market concentration. We investigate whether labor market power, as manifested by employer concentration and outside options, affect turnover rates. Utilizing online vacancy posting data, we find that moving from the 25th percentile to 75th percentile of employer concentration reduces the turnover rate by 5%, driven by high-school workers in low -skill industries. The same exercise for outside options implies a 39% increase in the turnover rate, driven by workers in high -skill industries.