Jan Eeckhout

Overview

Jan Eeckhout is an ICREA Research Professor of Economics at Universitat Pompeu Fabra in Barcelona who has also held positions at Penn, UCL, Princeton, and NYU.[1] He is best known for two contributions that have placed rising corporate market power at the center of mainstream economic debate: the peer-reviewed article The Rise of Market Power and the Macroeconomic Implications (De Loecker, Eeckhout & Unger, 2020), published in the Quarterly Journal of Economics, and the trade book The Profit Paradox: How Thriving Firms Threaten the Future of Work (Princeton University Press, 2021).[1][2] His research program on markups, market power, and inequality has had sustained influence on the discourse surrounding corporate rents and their macroeconomic implications, and is cited by researchers and institutions including David Autor, Gabriel Zucman, and the IMF in analyses of rising corporate profits and rent-seeking.[1][3]

The Markups Research

Eeckhout co-authored The Rise of Market Power and the Macroeconomic Implications with Jan De Loecker (KU Leuven) and Gabriel Unger (Harvard), extending the firm-level markup estimator De Loecker and Warzynski developed in the American Economic Review (2012) to a long, economy-wide U.S. panel of publicly traded firms in Compustat (1955–2016).[2] The paper's headline finding is that sales-weighted average U.S. markups rose from roughly 21% above marginal cost in 1980 to roughly 61% by 2016, with the increase concentrated in a rising upper tail of the markup distribution while the median firm's markup remained essentially unchanged.[2] The authors argue this pattern can account for several secular trends since 1980: the decline in labor's share of national income, a parallel decline in the share going to non-land capital, and declining business dynamism.[2]

The paper's methodology is contested within economics. James Traina (2018) argues that including Selling, General & Administrative (SG&A) expenses — which have grown as a share of firm cost structures — as part of variable costs substantially attenuates the measured markup rise, finding markups increased only modestly and remained within their historical range.[2] Susanto Basu (2019) surveys the main approaches and concludes that different reasonable assumptions produce substantially different conclusions, and that existing methods cannot yet determine with confidence whether U.S. markups have been roughly stable or risen only modestly.[2] A 2025 comment by Benkard, Miller & Yurukoglu disputes the results on sample-construction grounds, to which De Loecker, Eeckhout & Unger have published a reply — showing the measurement debate remains active more than five years after publication.[2]

The Profit Paradox

The Profit Paradox (2021) is Eeckhout's popular synthesis of the markups research for a general audience.[1] It restates the QJE paper's empirical case in accessible language and extends the argument to the labor market and wage-setting specifically. Eeckhout's central claim is that rising market power is primarily a story about wages: as a shrinking set of dominant firms raise prices above competitive levels, they restrict output and hiring, reducing aggregate labor demand and depressing wages economy-wide — including at firms that hold no market power of their own.[1]

Unlike the academic paper, the book closes with concrete policy proposals for restoring competition, including broadening antitrust review beyond consumer-price effects to weigh wage and labor-market effects, making mergers harder to approve, substantially strengthening antitrust enforcement capacity, selective regulation of dominant digital platforms short of breakup, and rethinking the scope of intellectual property protection.[1] The book was well received in general and trade outlets; Kirkus Reviews, NPR, and the IMF's Finance & Development all covered it, and economists David Autor (MIT) and Gabriel Zucman blurbed it as a significant contribution.[1]

Relation to the Georgist Case

Eeckhout's work matters to the Georgist case without being Georgist at all: it documents, using mainstream industrial-organization economics with no Georgist framing, a large and growing wedge between price and marginal cost — a form of economic rent in the classical sense — concentrated among a shrinking set of dominant firms.[2] This is the modern, non-land generalization of the rent problem that Henry George anticipated in outline: a growing share of the surplus from production is captured by owners of scarce, non-produced advantage rather than distributed to labor and ordinary capital.[2]

The markup findings are a close empirical cousin of Rognlie's capital-share decomposition: where Rognlie shows the rise in capital's income share is concentrated in housing (land) at the macro level, De Loecker, Eeckhout & Unger show a parallel rise in markup rent at the micro, firm-accounting level.[2] Both point away from the older "generic capital deepening" story and toward some form of concentrated, rent-like surplus as the explanation for shifts in factor shares since around 1980.[2]

Eeckhout's work is listed as supporting evidence on the wiki's corporate profits increasingly reflect rents outcome page, which assesses the broader evidence as "moderate–strong that the profit rise is real and abnormal; contested on how much is rent vs. efficiency."[3] The main rival reading comes from the superstar firms literature (Autor et al. 2020), which attributes rising concentration substantially to genuine technology-driven productivity divergence rather than rent extraction — a dispute that remains genuinely contested in the literature.[1][2][3]

At the same time, Eeckhout's work is explicitly not about land: neither the QJE paper nor The Profit Paradox discusses land value taxation, land rent, or real estate as a source of the market power documented.[1][2] Its relevance to this wiki is as an influential, non-Georgist popularization of the "rent problem, generalized beyond land" argument — evidence that the underlying economic logic Georgists apply to land is recognized as a live concern in a different domain by a mainstream economist working entirely outside the Georgist tradition.[1]

See Also

• De Loecker, Eeckhout & Unger — The Rise of Market Power and the Macroeconomic Implications
• The Profit Paradox: How Thriving Firms Threaten the Future of Work
• Corporate Profits Increasingly Reflect Rents
• Superstar Firms
• Economic Rent
• The Rentier Economy

Sources

1. Jan Eeckhout (2021), The Profit Paradox: How Thriving Firms Threaten the Future of Work, Princeton University Press. Princeton UP — used for Eeckhout's affiliation (ICREA/UPF Barcelona; prior positions at Penn, UCL, Princeton, NYU), the book's core argument extending markups research to wages and labor markets, its policy proposals, its reception (Kirkus, NPR, IMF, blurbs by Autor and Zucman), and the characterization of its scope as ranging "from cat food to caskets."
2. Jan De Loecker, Jan Eeckhout & Gabriel Unger (2020), "The Rise of Market Power and the Macroeconomic Implications," Quarterly Journal of Economics 135(2), 561–644. DOI: 10.1093/qje/qjz041 · NBER WP 23687 — used for the headline markup findings (≈21%→61%, 1980–2016), the upper-tail concentration pattern, the macro implications for labor share and business dynamism, the relation to Rognlie's capital-share decomposition, the Traina/Basu/Benkard measurement critiques, and the paper's silence on land. See also wiki summary.
3. Wiki: Corporate profits increasingly reflect rents — internal navigation only; records the outcome page's assessment of the broader evidence as "moderate–strong for the profit rise itself; contested on how much is rent vs. efficiency," with Eeckhout's work listed among the supporting research.

[VERIFY: Eeckhout's birth year, nationality, and doctoral training are not documented in the supplied corpus and are omitted pending a reliable external source. His personal website (janeeckhout.com) is referenced in the markups paper's source notes but could not be independently fetched this session.]