Do Firms Respond to Gender Pay Gap Transparency?

Morten Bennedsen, Elena Simintzi, Margarita Tsoutsoura, Daniel WolfenzonFinance资产定价UTD24

Journal of Finance2022-05-03Center for Economic and Policy Research; Cornell UniversityDOI

Citations163

ABSTRACT We examine the effect of pay transparency on the gender pay gap and firm outcomes. Using a 2006 legislation change in Denmark that requires firms to provide gender‐disaggregated wage statistics, detailed employee‐employer administrative data, and difference‐in‐differences and difference‐in‐discontinuities designs, we find that the law reduces the gender pay gap, primarily by slowing wage growth for male employees. The gender pay gap declines by 2 percentage points, or 13% relative to the prelegislation mean. Despite the reduction of the overall wage bill, the wage transparency mandate does not affect firm profitability, likely because of the offsetting effect of reduced firm productivity.

Transparency (behavior)Gender pay gapBusinessGender gapAccountingDemographic economicsLabour economicsEconomicsPolitical scienceLawWageGender, Labor, and Family Dynamics