Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/237350 
Year of Publication: 
2021
Series/Report no.: 
ECONtribute Discussion Paper No. 105
Publisher: 
University of Bonn and University of Cologne, Reinhard Selten Institute (RSI), Bonn and Cologne
Abstract: 
Wage transparency rules arguably enable workers better to assess their contribution to firm value, allowing them to make wage demands that more accurately reflect their value for the employing firm and to lower wage gaps in turn. This paper contains a formal analysis of transparency rules and their effects on wages. We find that these rules induce firms to behave strategically with the aim of manipulating the information workers receive. We identify a large class of rules that yield an identical equilibrium outcome. For productivity distributions with decreasing (increasing) hazard rate, transparency rules increase (potentially decrease) workers' payoff.
Subjects: 
Wage-setting
transparency rule
payoff
strategic effect
learning effect
JEL: 
J31
J71
K31
M51
Document Type: 
Working Paper

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