Do Firms Respond to Gender Pay Gap Transparency?

By Morten Bennedsen, Elena Simintzi, Margarita Tsoutsoura, Daniel Wolfenzon. Journal of Finance, 2019

178 citations recorded by the source corpus.

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 dis-aggregated wage statistics. Using detailed employee-employer administrative data and a difference-in-differences approach, we find that 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 7% reduction relative to the pre-legislation mean. In addition, the wage transparency mandate causes a reduction in firm productivity and in the overall wage bill, leaving firm profitability unchanged.

Subfields: Economics and Econometrics, Gender Studies, Public Administration

View Paper: https://www.semanticscholar.org/paper/7229386b56170f1a039a8eb3b420378599186d72

Citations in the corpus

• Pay Transparency and the Gender Gap (2019, unknown): “Closer to the present context, Bennedsen et al. (2019) examined the impact of a law in Denmark that required firms of more than 35 employees to provide salary data by gender to employees through their employee representative.”