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Pay transparency and gender equality

Pay transparency and gender equality

482/2020 Emma Duchini, Stefania Simion and Arthur Turrell
working papers, political economy

482/2020 Emma Duchini, Stefania Simion and Arthur Turrell

The 2018 UK transparency policy mandates that firms with at least 250 employees publicly disclose gender equality indicators. A difference-in-differences model exploiting variations in this policy across firm size and time shows that greater transparency closes 14 percent of the gender pay gap by reducing men’s wage growth. Additionally, the policy increases transparency in the hiring process, as firms are 10 percent more likely to post wages in their vacancies. Reputation concerns seem to influence employers’ reactions, as firms publishing worse equality indicators obtain lower impression scores in YouGov’s Women’s Rankings. Worse performing firms also improve gender equality the most.

Public Policy and Data