Lecture 9: Baker, M., Halberstam, Y., Kroft, K., Mas, A., & Messacar, D.

(2023). Pay transparency and the gender gap. American Economic

Journal: Applied Economics, 15(2), 157-183.

Main research question

This study investigates the impact of public sector salary disclosure laws on university
faculty salaries in Canada and their effect on the gender pay gap.

Methodology
The methodology used in the study involves analyzing data from Statistics Canada's University
and College Academic Staff System for the years 1989 through 2018. This is an annual census
survey that collects data on full-time teaching staff at degree-granting. The study employs an
event-study specification and regression models to quantify the precise impact of pay
transparency laws on the gender salary gap.

Main findings
The findings suggest that the salary disclosure laws led to a statistically significant reduction
in the gender pay gap by approximately 20-40 percent. The reduction in the gender pay gap
was primarily driven by slower relative growth in men's salaries compared to women's salaries.
The impact of the laws on the gender pay gap was stronger when the gender pay gap prior to
disclosure was smaller. The effects of salary disclosure laws were more pronounced in
unionized workplaces and among full professors. these authors have shown that employees
like anonymous transparency, as in Denmark, but exhibit a distaste for non-anonymous
transparency, as in Canada, and are often willing to pay a significant amount of money to
keep their salaries private. This may have implications for policymakers who are considering
transparency laws as a way to reduce gender gaps.