The Impact of Pay Transparency in Job Postings on the Labor Market

35 Pages Posted: 12 Aug 2022 Last revised: 18 Aug 2022

See all articles by David Arnold

David Arnold

University of California, San Diego (UCSD)

Simon Quach

University of Southern California

Bledi Taska

Emsi Burning Glass

Date Written: August 9, 2022

Abstract

In recent years, pay transparency in job postings has been proposed as one way to combat wage stagnation and reduce gender and racial wage gaps. However, there is limited empirical research on the impact of pay transparency in job postings on the labor market. While it may increase information to workers, potentially strengthening bargaining power, it also increases information to firms, potentially leading to tacit collusion in wage setting. The paper studies the impact of a January 2021 law in Colorado that required job postings to contain expected salary information. Using data from Burning Glass Technologies, we find that this law increased the fraction of postings with salary information by 30 percentage points, although there remains substantial non-compliance. For employers that posted salaries both before and after the policy, we find that posted salaries increased by about 3.6 percent, on average, following the policy.

Keywords: pay transparency, wages, labor economics

JEL Classification: J31, J38, J60

Suggested Citation

Arnold, David and Quach, Simon and Taska, Bledi, The Impact of Pay Transparency in Job Postings on the Labor Market (August 9, 2022). Available at SSRN: https://ssrn.com/abstract=4186234 or http://dx.doi.org/10.2139/ssrn.4186234

David Arnold (Contact Author)

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

Simon Quach

University of Southern California ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

HOME PAGE: http://https://sites.google.com/view/simonquach/home

Bledi Taska

Emsi Burning Glass ( email )

66 Long Wharf, Floor 2
Boston, MA 02110

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