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Pay Transparency and the Gender Gap

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Listed:
  • Michael Baker
  • Yosh Halberstam
  • Kory Kroft
  • Alexandre Mas
  • Derek Messacar

Abstract

We examine the impact of public sector salary disclosure laws on university faculty salaries in Canada. The laws, which enable public access to the salaries of individual faculty if they exceed specified thresholds, were introduced in different provinces at different times. Using detailed administrative data covering the majority of faculty in Canada, and an event-study research design that exploits within-province variation in exposure to the policy across institutions and academic departments, we find robust evidence that the laws reduced the gender pay gap between men and women by approximately 20–40 percent.

Suggested Citation

  • Michael Baker & Yosh Halberstam & Kory Kroft & Alexandre Mas & Derek Messacar, 2023. "Pay Transparency and the Gender Gap," American Economic Journal: Applied Economics, American Economic Association, vol. 15(2), pages 157-183, April.
  • Handle: RePEc:aea:aejapp:v:15:y:2023:i:2:p:157-83
    DOI: 10.1257/app.20210141
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    References listed on IDEAS

    as
    1. Cullen, Zoë & Perez-Truglia, Ricardo, 2023. "The salary taboo privacy norms and the diffusion of information," Journal of Public Economics, Elsevier, vol. 222(C).
    2. Picot, Garnett & Lu, Yuqian & Morissette, Rene, 2013. "The Evolution of Canadian Wages over the Last Three Decades," Analytical Studies Branch Research Paper Series 2013347e, Statistics Canada, Analytical Studies Branch.
    3. Morten Bennedsen & Elena Simintzi & Margarita Tsoutsoura & Daniel Wolfenzon, 2022. "Do Firms Respond to Gender Pay Gap Transparency?," Journal of Finance, American Finance Association, vol. 77(4), pages 2051-2091, August.
    4. Andreas Leibbrandt & John A. List, 2015. "Do Women Avoid Salary Negotiations? Evidence from a Large-Scale Natural Field Experiment," Management Science, INFORMS, vol. 61(9), pages 2016-2024, September.
    5. Zoë Cullen & Ricardo Perez-Truglia, 2022. "How Much Does Your Boss Make? The Effects of Salary Comparisons," Journal of Political Economy, University of Chicago Press, vol. 130(3), pages 766-822.
    6. Marlene Kim, 2015. "Pay Secrecy and the Gender Wage Gap in the United States," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(4), pages 648-667, October.
    7. David Card & Alexandre Mas & Enrico Moretti & Emmanuel Saez, 2012. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction," American Economic Review, American Economic Association, vol. 102(6), pages 2981-3003, October.
    8. Casey Warman & Frances Woolley & Christopher Worswick, 2010. "The evolution of male‐female earnings differentials in Canadian universities,1970–2001," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(1), pages 347-372, February.
    9. Alexandre Mas, 2017. "Does Transparency Lead to Pay Compression?," Journal of Political Economy, University of Chicago Press, vol. 125(5), pages 1683-1721.
    10. Ricardo Perez-Truglia, 2020. "The Effects of Income Transparency on Well-Being: Evidence from a Natural Experiment," American Economic Review, American Economic Association, vol. 110(4), pages 1019-1054, April.
    11. Trotter, Richard G. & Zacur, Susan Rawson & Stickney, Lisa T., 2017. "The new age of pay transparency," Business Horizons, Elsevier, vol. 60(4), pages 529-539.
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    More about this item

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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