with Morten Bennedsen, Elena Simintzi and Daniel Wolfenzon
Abstract: We examine whether pay transparency closes the gender pay gap and affects firm outcomes. The paper exploits a 2006 legislation change in Denmark that requires firms to provide gender dis-aggregated wage statistics. Using detailed employee-employer administrative data we find that the law has an effect in reducing the gender pay gap, primarily through slowing the wage growth for male employees. This effect is more pronounced for firms whose managers have more daughters, presumably due to the effect of daughters on managerial preferences, and for industries with higher gender pay differentials pre-treatment.
Such changes in firm wage policies following the passage of the law are associated with negative outcomes on overall firm productivity, but also with a reduction in firm wage bill, resulting in no significant effects on firm profitability.