Working Paper: NBER ID: w25145
Authors: Zo B. Cullen; Ricardo Perez-Truglia
Abstract: The diffusion of salary information has implications for labor markets, such as wage discrimination policies and collective bargaining. Access to salary information is believed to be limited and unequal, but there is little direct evidence on the sources of these information frictions. Social scientists have long conjectured that privacy norms around salary (i.e., the “salary taboo”) play an important role. We provide unique evidence of this phenomenon based on a field experiment with 755 employees at a large commercial bank in Southeast Asia. We show that many of its employees are both unwilling to reveal their salaries to coworkers and reluctant to ask coworkers about their salaries. These frictions persist, in smaller magnitude, when sharing less sensitive information on seniority. We discuss implications for pay transparency policies and the gender wage gap.
Keywords: salary information; privacy norms; information diffusion; labor markets; pay transparency
JEL Codes: C93; D83; D91; J3; J71; M5; Z1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| privacy norms (I10) | lower willingness to search for salary information (J29) |
| perceived higher salary (J31) | reluctance to share salary information (J31) |
| privacy norms (I10) | reluctance to share salary information (J31) |