The Joint Effect of Pay Range Disclosure Width and Gender on Job Applications

Abstract

We use a laboratory experiment to examine how the width of the pay range that companies disclose on job postings affects the application decisions of men versus women. While pay range disclosures are intended to help reduce pay inequities such as the gender wage gap, we predict and find that when companies widen the pay range disclosed in a job posting, they deter women more than men from applying in the first place. Results from both between-subjects and within-subjects tests show women are significantly less willing to apply to a job with a wide relative to narrow pay range, while men appear indifferent between a wide and narrow pay range. Path analysis suggests that perception of pay inequity is a primary channel through which the effect operates. Our findings have important implications for regulators considering implementing or amending pay disclosure laws and for companies navigating the emerging pay disclosure landscape.

Keywords: pay transparency, disclosure, job search, gender, diversity, equity

JEL Classification: C91, J01, J16, J24, J30, J70, M12, M14, M40, M41, M50, M52, M54