Working Paper: NBER ID: w30623
Authors: Jonathon Hazell; Christina Patterson; Heather Sarsons; Bledi Taska
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.
Keywords: wage setting; national wage setting; labor market; wage inequality
JEL Codes: J3; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| firm policy (L21) | wage uniformity (J31) |
| national wage setting policies (J38) | correlated wage growth (J31) |
| local shocks to wages (J39) | wages in firms practicing national wage setting (J31) |
| national wage setting (J38) | nominal wage inequality (J31) |
| national wage setting (J38) | employment in low-wage areas (J68) |