Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278539 
Year of Publication: 
2023
Series/Report no.: 
ECONtribute Discussion Paper No. 244
Publisher: 
University of Bonn and University of Cologne, Reinhard Selten Institute (RSI), Bonn and Cologne
Abstract: 
We present a natural field experiment on promoting pay equity through simple modifications to the salary review process involving 623 middle managers and 8,951 subordinate employees of a large technology firm.We first document a gender gap not only in salary levels but also in salary increases. Our treatments provide for a gender-neutral reallocation of the salary increase budget available to middle managers aimed at promoting pay equity, along with different variants of a corresponding decision guidance. We show that the budget reallocation combined with an explicit decision guidance, while still leaving managers discretion in allocating the budget, can completely eliminate the gender gap in salary increases. The treatments also do not appear to undermine desired performance differentiation in salary increases. We thus show that simple modifications to the salary review process can go a long way toward achieving pay equity, preventing the widening of gender gaps throughout the career.
Subjects: 
Randomized Controlled Trial
Pay equity
Gender pay gap
Salary structure
JEL: 
J31
J71
M52
Document Type: 
Working Paper

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