Pay transparency and entrepreneurship

Longfei Shang and Walid Saffar

Journal of Banking & Finance, 2024, vol. 162, issue C

Abstract: Using the staggered adoption of U.S. state-level pay transparency laws that improve pay transparency, we find that the probability of high-wage workers becoming entrepreneurs significantly increases following the adoption of such laws. Moreover, the salaries of high-wage workers significantly increase following the laws’ passage. These findings are consistent with theory suggesting that improved pay transparency increases the relative return of entrepreneurship for high-wage workers.

Keywords: Pay transparency; Entrepreneurship; Pay transparency laws; Compensation (search for similar items in EconPapers)
JEL-codes: J28 J33 K31 L26 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:162:y:2024:i:c:s0378426624000487

DOI: 10.1016/j.jbankfin.2024.107128

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