Wage transparency and promotion incentives

Determine whether introducing wage transparency can increase expected worker utility when promotion wage increases serve an incentive role for firm-specific human-capital investment.

Background

The baseline model shows that wage transparency can weaken the signal-jamming role of job title inflation. When promotion wage increases also motivate worker investment, however, job title inflation may reduce investment and expected worker utility. The paper does not resolve whether wage transparency reverses or mitigates this welfare effect in that enriched setting.

References

Finally, based on the analysis in Section~\ref{sec:incentive}, we conjecture that the introduction of wage transparency could instead increase expected worker utility if promotion wage increases serve an incentive role.

— Promotion Signaling and Signal Jamming: An Analysis of Job Title Inflation  (2610.26494 - Chen et al., 19 Oct 2026) in Section 3.2, subsection “Wage Transparency”