Working Paper: CEPR ID: DP14237
Authors: Morten Bennedsen; Elena Simintzi; Margarita Tsoutsoura; Daniel Wolfenzon
Abstract: We examine the effect of pay transparency on gender pay gap and firm outcomes. This paper exploits a 2006 legislation change in Denmark that requires firms to provide gender disaggregated wage statistics. Using detailed employee-employer administrative data and a difference-in-differences and difference-in-discontinuities designs, we find the law reduces the gender pay gap, primarily by slowing the wage growth for male employees. The gender pay gap declines by approximately two percentage points, or a 13% reduction relative to the pre-legislation 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.
Keywords: gender pay gap; transparency; difference-in-discontinuities
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 2006 legislation change (K29) | gender pay gap (J31) |
| 2006 legislation change (K29) | wage growth for male employees (J31) |
| 2006 legislation change (K29) | female wages (J31) |
| 2006 legislation change (K29) | firm profitability (L21) |
| 2006 legislation change (K29) | productivity (O49) |
| 2006 legislation change (K29) | hiring of female employees (J16) |
| 2006 legislation change (K29) | female promotions (M51) |
| 2006 legislation change (K29) | male promotion rates (J62) |