Assoc. Prof. Heather Sarsons, Ph.D.

National Wage Setting

How do firms set wages across space? In this CEPR Discussion Paper, Heather Sarsons and her co-authors document four facts using job-level vacancies and matched employer-employee data. First, firms rather than locations explain most of the variation in wages within a job. Second, nominal wages within the firm vary little with local prices. Third, firms most strongly influence wage growth across locations. Fourth, local wage shocks impact wages in the rest of the firm, but only for jobs that initially pay identical wages. The researchers argue these patterns indicate national wage setting, in which firms choose to set the same nominal wage for a job across all their establishments.

Heather Sarsons is an economist with research interests in labor, personnel, and behavioral economics. Much of her work focuses on understanding how norms, stereotypes, and biases influence labor market outcomes and inequality.
Heather Sarsons is an Associate Professor (untenured) at the University of Chicago Booth School of Business. Prior to joining Booth, she was a post-doctoral fellow at the University of Toronto's GATE Institute and the U of T Economics Department. She received a PhD in Economics from Harvard, and a BA in economics from The University of British Columbia. While pursuing her PhD, she was also a visiting student at the London School of Economics. She is an IZA Research Affiliate, and her work has been featured in the New York Times, The Economist, and the Washington Post.