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National Wage Setting

Author

Listed:
  • Hazell, Jonathon

    (London School of Economics)

  • Patterson, Christina

    (University of Chicago Booth School of Business)

  • Sarsons, Heather

    (University of British Columbia, Vancouver)

  • Taska, Bledi

    (Lightcast)

Abstract

How do firms set wages across space? Using job-level vacancy data and a survey of HR managers, we show that 40-50% of a job's posted wages are identical across locations within a firm. Moreover, nominal posted wages within the firm vary relatively little with local prices, a pattern we verify with other measures of job level wages. Using the co-movement of wage growth across establishments, we argue these patterns reflect national wage setting - a significant minority of firms choose to set the same nominal wage for a job across all their establishments, despite varying local labor market conditions.

Suggested Citation

  • Hazell, Jonathon & Patterson, Christina & Sarsons, Heather & Taska, Bledi, 2023. "National Wage Setting," IZA Discussion Papers 16493, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16493
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    References listed on IDEAS

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    More about this item

    Keywords

    national wage setting; labor markets;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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