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Do Firms Respond to Gender Pay Gap Transparency?

Morten Bennedsen, Elena Simintzi, Margarita Tsoutsoura and Daniel Wolfenzon

No 25435, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine the effect of pay transparency on gender pay gap and firm outcomes. This paper exploits a 2006 legislation change in Denmark that requires firms to provide gender disaggregated wage statistics. Using detailed employee-employer administrative data and a difference-in-differences and difference-in-discontinuities designs, we find the law reduces the gender pay gap, primarily by slowing the wage growth for male employees. The gender pay gap declines by approximately two percentage points, or a 13% reduction relative to the pre-legislation mean. Despite the reduction of the overall wage bill, the wage-transparency mandate does not affect firm profitability, likely because of the offsetting effect of reduced firm productivity.

JEL-codes: G18 G28 J16 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-gen and nep-lab
Note: CF LS
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Published as MORTEN BENNEDSEN & ELENA SIMINTZI & MARGARITA TSOUTSOURA & DANIEL WOLFENZON, 2022. "Do Firms Respond to Gender Pay Gap Transparency?," The Journal of Finance, vol 77(4), pages 2051-2091.

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Journal Article: Do Firms Respond to Gender Pay Gap Transparency? (2022) Downloads
Working Paper: Do Firms Respond to Gender Pay Gap Transparency? (2019) Downloads
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