Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278931 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16233
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We show that providing publicly available wage information in vacancies, so-called external pay transparency, can reduce the gender wage gap. There is an increasing interest in pay transparency policies as a tool to combat unequal pay. We exploit a reform of Austria's Equal Treatment Law to evaluate how providing wage information in vacancies affects the gender wage gap. To take into account that the value of providing such external pay information is likely to be heterogeneous along the wage distribution, we implement a Quantile Difference-in-Difference model. The reform led to a small overall reduction of the gender wage gap. Our main results highlight that reductions in the wage gap are larger in circumstances where women are likely to hold misspecified beliefs about their labor market options and when needing to make job acceptance decisions under pressure. The reduction in the gender wage gap was caused by an increase in women's earnings, particularly at the lower part of the distribution. Earnings of men, on the other side, remained largely constant. Our results lend support to policy proposals aimed at increasing external pay transparency.
Subjects: 
mandatory wage posting
pay transparency law
gender wage gap
job postings
quantile DiD
JEL: 
J31
J23
J23
J63
Document Type: 
Working Paper

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