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Pay Transparency and Inventor Productivity: Evidence From State‐Level Pay Secrecy Laws

Author

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  • Huasheng Gao
  • Po‐Hsuan Hsu
  • Jin Zhang

Abstract

We examine the role of pay transparency in inventor productivity by exploiting the staggered adoption of state‐level pay secrecy laws, which enhance pay transparency in the workplace. We find a significant increase in inventor productivity of firms located in states that have passed such laws relative to firms elsewhere. This relation is more pronounced for firms in states with lower levels of pre‐existing pay transparency. We further show that pay secrecy laws promote inventor productivity by motivating inventors—especially minority inventors—to exert more effort, enhancing the diversity of inventor teams, and encouraging all inventors to pursue promotions.

Suggested Citation

  • Huasheng Gao & Po‐Hsuan Hsu & Jin Zhang, 2025. "Pay Transparency and Inventor Productivity: Evidence From State‐Level Pay Secrecy Laws," RAND Journal of Economics, RAND Corporation, vol. 56(4), pages 389-418, December.
    • Handle: RePEc:bla:randje:v:56:y:2025:i:4:p:389-418
    DOI: 10.1111/1756-2171.70005
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    Cited by:

    1. Amsalu K. Addis, 2026. "The impact of renewable energy on CO2 emissions in Middle Eastern and BRICS economies," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 13(1), pages 1-20, December.

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