The Salary Taboo: Privacy Norms and the Diffusion of Information

Zoë B. Cullen and Ricardo Perez-Truglia

No 25145, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: C93 D83 D91 J3 J71 M5 Z1 (search for similar items in EconPapers)
Date: 2018-10
New Economics Papers: this item is included in nep-exp and nep-lma
Note: LE LS PE POL
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Citations: View citations in EconPapers (18)

Published as Zoë Cullen & Ricardo Perez-Truglia, 2023. "The salary taboo privacy norms and the diffusion of information," Journal of Public Economics, vol 222.

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