Date of Award

Spring 2022

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Altonji, Joseph

Abstract

My dissertation examines the role of private information available to workers and firms in labor markets. In particular, I study three policies in the US, Austria, and Germany which either restrict or allow one side of the market to access information available to the other side. I evaluate the causal effects of these policies on different labor market outcomes, and particularly on pay disparity. In Chapter 1, I study the effects of US salary history bans which restrict employers from inquiring about job applicants' pay history during the hiring process but allow candidates to voluntarily share information. Using a difference-in-differences design, I show that these policies narrowed the gender pay gap significantly by 2 percentage points, driven almost entirely by an increase in female earnings. The bans were also successful in weakening the auto-correlation between current and future earnings, especially among job-changers. I provide novel evidence showing that when employers could no longer nudge candidates for information, the likelihood of voluntarily disclosing salary history decreased among job applicants and by 2 percentage points more among women. I then develop a salary negotiation model with asymmetric information, where I allow job applicants to choose whether to reveal pay history, and use this framework to explain my empirical findings on disclosure behavior and gender pay gap. In Chapter 2, I study (jointly with Andreas Gulyas and Sebastian Seitz) the 2011 Austrian Pay Transparency Law, which requires firms above a size threshold to publish internal reports on the gender pay gap. Using an event-study design, we show that the policy had no discernible effects on male and female wages, thus leaving the gender wage gap unchanged. The effects are precisely estimated and we rule out that the policy narrowed the gender wage gap by more than 0.4 percentage points. Moreover, we do not find evidence for wage compression within establishments. We discuss several possible reasons why the reform did not reduce the gender wage gap. Finally, in Chapter 3, I study (jointly with Sebastian Seitz) the 2018 German Pay Transparency policy which allows employees in establishments with more than 200 workers, to ask their employers for information about the average earnings of their opposite-gender coworkers who do `equal work'. Using an event study design and matched employer-employee data, we show that the policy had no discernible effects on male and female wages, thus leaving the gender wage gap unchanged. Using survey evidence, we further show that only 1% of men and 2.7% of women had asked their employers for information in the previous year. We find that workers were not willing to ask for information either because they believed that there was no significant gender pay gap at their workplaces or because they were apprehensive of hurting their `image'. We argue that transparency, as enacted in Germany, placed an additional barrier to information access by requiring workers to seek out information instead of mandating firms to disclose data.

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