Societal-Level Implications of Pay Transparency

Abstract

Abstract Regulatory efforts aimed at encouraging pay transparency and facilitating employee knowledge ultimately strive to achieve broad social goals such as reducing information asymmetries and barriers to labor mobility and addressing gender and racial pay disparities. The focus of this chapter is therefore on the degree to which broad-scale pay transparency interventions achieve such goals. In addition, the chapter examines the potential unintended negative consequences that such interventions may have on societal-level outcomes. Specifically, after first presenting a quick review of the various regulatory initiatives adopted by governments throughout the world, this chapter reviews the evidence regarding the impact of such interventions on four main sets of outcomes, namely the gender pay gap, labor productivity, inequality, and employee well-being.