Pay Transparency and Gender Equality

Abstract: Since 2018 UK firms with at least 250 employees have been mandated to publicly disclose gender equality indicators. Exploiting variations in this mandate across firm size and time we show that pay transparency closes 18 percent of the gender pay gap by reducing men's wage growth. The public availability of the equality indicators seems to influence employers' response as worse performing firms and industries more exposed to public scrutiny reduce their gender pay gap the most. Employers are also 9 percent more likely to post wages in job vacancies, potentially in an effort to improve gender equality at entry level.