Scandinavian Working Papers in Economics

Working Papers,
Copenhagen Business School, Department of Economics

No 17-2022: Wage Transparency and the Gender Pay Gap: A Survey

Morten Bennedsen (), Birthe Larsen () and Jiayi Wei ()
Additional contact information
Morten Bennedsen: University of Copenhagen
Birthe Larsen: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark
Jiayi Wei: INSEAD

Abstract: We survey the literature on the effects of increased transparency of gender segregated wages on the pay gap between men and women in comparable jobs. Pay transparency is promoted by countries and supra-national institutions and we categorise reforms according to their content and coverage. A growing number of papers have used variations of difference-in-difference estimation methods to analyse the impact of reforms on the gender pay gap (GPG), and from these we extract four main findings: First, reform-based studies find that pay transparency reforms reduce the GPG in all countries but one, which finds no effect. Second, in Canada, Denmark and the UK, the reduction in the GPG from transparency reforms originate from a reduction in the growth rate of male income and less from an increase in women’s pay. Third, there is fragmented evidence for the impact of transparency reforms on other labour outcomes and firm productivity. Fourth, the monetary implementation cost of transparency reforms is, in general, small both for individual firms and public administration. These finding are consistent with the notion that gender wage transparency reforms are an effective policy tool to reduce the GPG.

Keywords: Wage Transparency; Gender Pay Gap; Policy Reforms

JEL-codes: J16; J31; J38

Language: English

39 pages, November 19, 2022

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