The Economics Department at Princeton is pleased to announce that Professor Simon Jäger joined the department and the Industrial Relations Section this spring from MIT.

Jäger’s research focuses on labor markets and studies the origins and consequences of inequality. He works on topics such as competition in the labor market, unions and other forms of worker representation, unemployment, and the role of psychological factors in the labor market.

One of his recent research papers, “Worker Beliefs About Outside Options,” examines worker beliefs about external wage distribution and how these beliefs impact their earning potential and the wage policies of the company. In the paper, Jäger and his co-authors find that “workers wrongly anchor their beliefs about outside options on their current wage,” and would experience a more significant wage change if they switched roles than they believe, “workers in low-paying firms underestimate wages elsewhere,” and “in response to information about the wages of similar workers, respondents correct their beliefs about their outside options and change their job search and wage negotiation intentions.”

Jäger’s methodological approach combines experimental and quasi-experimental methods, often utilizing large administrative datasets from countries such as Germany, Finland, and Argentina.

Beyond his academic work, Jäger plays an active role in policy advice and public discourse. He served as an advisor to the German Federal Ministry for Economic Affairs. In 2024, Jäger won the Gustav Stolper Prize, an award given to outstanding scientists who have employed the findings of economic research to influence the public debate on economic issues and problems, and have made ​​important contributions to understanding and solving contemporary economic problems.

When asked about what he is looking forward to as he joins Princeton, Jäger shared, “I am very interested in understanding which labor market institutions can foster inclusive growth and create opportunities for workers across the income spectrum. Many of the tools and frameworks I use to study topics like worker representation and its effects on productivity and wages were pioneered by economists here in the department and the Industrial Relations Section. The Department and the Section have an extraordinary legacy in advancing labor economics and industrial relations research, and it is both humbling and inspiring to join this remarkable community and shape it going forward. I am also thrilled to join the School of Public and International Affairs; I think the connection between rigorous research and impactful policy work is ideally a two-way street where both sides can learn from one another.”

Beginning in January 2025, Jäger is teaching a graduate course on labor economics. David Lee, Acting Director of the Industrial Relations Section, shared the following regarding Jäger’s appointment, “we are thrilled to welcome Simon Jäger as a colleague in the economics department, and faculty associate of the Industrial Relations Section. He comes to us from MIT, and as director of the IZA Institute of Labour Economics, having established himself as a leading labor economist studying a broad range of topics, including employment relationships and labor market institutions and collective bargaining around the world. He is ideally suited to continue the legacy of understanding the employment relationship that has deep roots in the history of the Industrial Relations Section.”