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Do Workers Benefit From Wage Transparency Rules?

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  • Oliver Gürtler
  • Lennart Struth

Abstract

Wage transparency rules arguably enable workers better to assess their contribution to firm value, allowing them to make wage demands that more accurately reflect their value for the employing firm. This article contains a formal analysis of transparency rules and their effects on wages and the payoffs of the targeted workers. We find that these rules induce firms to behave strategically with the aim of manipulating the information workers receive. We identify a large class of rules that yield an identical equilibrium outcome. For productivity distributions with decreasing (increasing) hazard rate, transparency rules increase (potentially decrease) workers' payoffs.

Suggested Citation

  • Oliver Gürtler & Lennart Struth, 2025. "Do Workers Benefit From Wage Transparency Rules?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 66(3), pages 1099-1128, August.
    • Handle: RePEc:wly:iecrev:v:66:y:2025:i:3:p:1099-1128
    DOI: 10.1111/iere.12750
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