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State bans on pay secrecy and earnings: Evidence from the National Longitudinal Survey of Youth 1997

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  • Srikant Devaraj
  • Pankaj C. Patel

Abstract

Pay secrecy policies restrict employees from discussing pay and compensation with their co‐workers. In addition to the federal law, 11 US states have enacted additional laws further reinforcing the ban on pay secrecy. Recent evidence shows that state pay secrecy bans lower wage gap for females and increase earnings of managers by a small amount. In a longitudinal cohort of 6046 individuals representing 35,387 individual‐year observations from the National Longitudinal Survey of Youth 1997 (NLSY 1997), we do not find support for the benefits these state‐level policies have on earnings in general, or for managerial employees in particular. Our findings are consistent for NLSY 1979 cohort. The effects did not vary by sex, age or managerial status in either cohort, and the differences by higher cognitive ability (those in the upper quartile or above the 90th percentile)—is significant in the NLSY 1997 cohort, but not in the NLSY 1979 cohort—were not conclusive. The findings indicate limited effects of state‐level pay secrecy laws.

Suggested Citation

  • Srikant Devaraj & Pankaj C. Patel, 2022. "State bans on pay secrecy and earnings: Evidence from the National Longitudinal Survey of Youth 1997," British Journal of Industrial Relations, London School of Economics, vol. 60(4), pages 697-734, December.
    • Handle: RePEc:bla:brjirl:v:60:y:2022:i:4:p:697-734
    DOI: 10.1111/bjir.12673
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