 Each year since 2018, more than 10,000 UK firms have been required to publicly disclose their gender pay gap and gender composition . This paper studies how this transparency policy affects the occupational outcomes and wages of male and female workers . Theoretically, pay transparency represents an information shock that alters the bargaining power of male and female employees vis-\`a-vis the firm in an asymmetric way. As women are currently underpaid , this shock may improve women's relative  outcomes. We test these theoretical predictions using a difference-in-difference strategy that exploits the variation in the UK mandate across firm size and time. Our results show that pay transparency increases the probability that womenare hired in above-median-wage occupations by 5 percent compared to the pre-policy mean. Additionally, it leads to a 2.8 percent decrease in male real hourly pay in treated firms compared to control ones. Combining the difference-in-difference strategy with a text analysis of job listings, we also find suggestive evidence that treated firms in industries with a high gender pay gap become more likely to post wage information than firms in the control group .
This paper studies firms' and employees' responses to pay transparency requirements. Each year since 2018, more than 10,000 UK firms have been required to disclose publicly their gender pay gap and gender composition along the wage distribution . Theoretically, pay transparency is meant to act as an information shock that alters the bargaining power of male and female employees vis-\`a-vis the firm in opposite ways. Coupled with the potential negative effects of unequal pay on firms' reputation , this shock could improve women's relative occupational and pay outcomes. We test these theoretical predictions using a difference-in-differences strategy that exploits variations in the UK mandate across firm size and time. This analysis delivers four main findings. First, pay transparency increases women's probability of working in above-median-wage occupations by 5 percent compared to the pre-policy mean. Second, while this effect has not yet translated into a significant rise in women's pay, the policy leads to a 2.8 percent decrease in men's real hourly pay , reducing the pre-policy gender pay gap by 15 percent. Third, combining the difference-in-differences strategy with a text analysis of job listings, we find suggestive evidence that treated firms adopt female-friendly hiring practices in ads for high-gender-pay-gap occupations. Fourth, a reputation motive seems to drive employers' reactions, as firms publishing worse gender equality indicators score lower in YouGov Women's Rankings. Moreover, publicly listed firms experience a 35-basis-point average fall in cumulative abnormal returns in the days following their publication of gender equality data .
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This paper studies firms' and employees' responses to pay transparency requirements.
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publicly disclose
disclose publicly
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. This paper studies how this transparency policy affects the occupational outcomes and wages of male and female workers
along the wage distribution
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represents
is meant to act as
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an asymmetric way. As women are currently underpaid
opposite ways. Coupled with the potential negative effects of unequal pay on firms' reputation
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may
could
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occupational and pay
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difference-in-difference
difference-in-differences
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the variation
variations
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Our results show that
This analysis delivers four main findings. First,
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the probability that womenare hired
women's probability of working
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Additionally, it
Second, while this effect has not yet translated into a significant rise in women's pay, the policy
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men's
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in treated firms compared to control ones. Combining the difference-in-difference
, reducing the pre-policy gender pay gap by 15 percent. Third, combining the difference-in-differences
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also
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in industries with a high gender pay gap become more likely to post wage information than firms in the control group
adopt female-friendly hiring practices in ads for high-gender-pay-gap occupations. Fourth, a reputation motive seems to drive employers' reactions, as firms publishing worse gender equality indicators score lower in YouGov Women's Rankings. Moreover, publicly listed firms experience a 35-basis-point average fall in cumulative abnormal returns in the days following their publication of gender equality data