The Effect of Pay Transparency Laws on Wages and Discrimination Complaints

Patrick Bennett, Ian Burn and Luke Walsh

No 202312, Working Papers from University of Liverpool, Department of Economics

Abstract: How can policymakers decrease wage gaps for groups covered by anti-discrimination legislation? In this paper, we show there is no impact of pay transparency laws on wages, while these policies lead to an increase in discrimination complaints. Using Current Population Survey (CPS) data we exploit the variation in US states that passed pay transparency laws between 1977 and 2021. We find no evidence of wage changes or changes in wage gaps for disadvantaged groups. However, using discrimination complaints filed with the Equal Employment Opportunity Commission (EEOC) between 2009 and 2021, we find the number of lawsuits filed due to workplace discrimination increases by 25-40%. Our findings establish that pay transparency legislation alone will not benefit workers, and that strong anti-discrimination laws are an important complement alongside pay transparency to increase equality.

Pages: 33 pages
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:liv:livedp:202312

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