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Gender pay gap shrinks when companies disclose wages

news.cornell.edu

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Re: Gender pay gap shrinks when companies disclose wages

#21

Post by iguy »

gnicholas wrote: post #16
xfitm3 wrote: post #2

I found this to be really interesting: "The researchers were especially surprised by the way in which the companies adapted to the regulation – by slowing the growth of men’s wages, not increasing women’s."

Did the researchers measure employee departures? If wages stagnated in general, then one would expect that employees who are more desirable/mobile to depart. This would make it seem like wage equality went up, when in reality the people who were previously making more are still doing so — they're just doing it at a different company.

They say "we find no statistically significant change in departure rates of males or females across firm hierarchies."

Have not read it closely, but "no statistically significant" need not rule out the scenario that departures drive the whole effect. It's just saying that the error bar from counting departures is large enough to include zero, while the error bars on mean salary are smaller, because everyone has a salary but only a few leave.

Re: Gender pay gap shrinks when companies disclose wages

#22

Post by iguy »

fastball wrote: post #7
tapland wrote: post #3

Conclusions that the companies hired more women because of it are a bit weird to draw since every company that would be a comparison in the country also has to follow the same rules? And ofc it's solved by lowering the growth of male wages :D Business

No, they were comparing companies that didn't need to follow the regulation (companies with 24-34 employees) with companies that did (35+ employees). Of course, the problem with this is twofold: 1. Companies with 2. Companies with 35 employees. I do not think that variable was accounted for in any way by the study and that is problematic.

And, from skimming the paper, they have literally divided companies into two groups, 35. It could be that one giant employer (like a hospital system) is the whole story.

A more subtle study would be to look for a discontinuity: expect that firms with 10, 30, 100, 1000 employees will behave differently, but anything which happens sharply at 35 (and changes in this time) can be more confidently attributed to the law. But this is obviously harder to do.

Re: Gender pay gap shrinks when companies disclose wages

#23

Post by watwut »

xfitm3 wrote: post #2

I found this to be really interesting: "The researchers were especially surprised by the way in which the companies adapted to the regulation – by slowing the growth of men’s wages, not increasing women’s."

Many companies award salaries in fuzzy way where few good negotiators people negotiate themselves larger salaries then similarly performing rest. One would think that salary disclosure helps to close such gap among men themselves bringing average lower.

Re: Gender pay gap shrinks when companies disclose wages

#24

Post by iguy »

gherig4 wrote: post #8
xfitm3 wrote: post #2

I found this to be really interesting: "The researchers were especially surprised by the way in which the companies adapted to the regulation – by slowing the growth of men’s wages, not increasing women’s."

I experienced this first hand and as a result I departed for greener pastures. Isn't diversity a great thing when it suppresses wages, no wonder all the big boys are pushing for it.

The article cites a 2.5% reduction in overall wages, and a 2.5% reduction in productivity. (Or one was 2.8, but close enough). Which sounds exactly like what you suggest: the most productive employees used to get other offers, and use them to ask for raises, and now they leave, or just slack off.

Re: Gender pay gap shrinks when companies disclose wages

#25

Post by ve55 »

>From 2003 to 2008, the gender pay gap at the reporting companies shrank 7 percent, from 18.9 percent down to 17.5 percent

Is this really a large enough effect size to justify such a headline?

>Our findings suggest that regulatory mandates on pay transparency, as a means to overcome biases against women in the workforce, may be effective in closing the gender pay gap.

No, they really do not. A potential reduction from 18.9% to 17.5% does not 'close the gender pay gap', and attempting to close such a gap in this manner to begin with just demonstrates a misunderstanding of what confounding variables cause it to begin with.

Re: Gender pay gap shrinks when companies disclose wages

#26

Post by dba7dba »

xfitm3 wrote: post #2

I found this to be really interesting: "The researchers were especially surprised by the way in which the companies adapted to the regulation – by slowing the growth of men’s wages, not increasing women’s."

Based on what I have experienced in corporate America, this is completely expected behavior.

Re: Gender pay gap shrinks when companies disclose wages

#27

Post by factsaresacred »

Here's the study: https://wpcarey.asu.edu/sites/default/files/daniel_wolfenzon...

To describe a 7% change as "shrinks" is a bit of a stretch.

And to attribute it to solely to the requirement to disclose may be incorrect as there was only a 1.4% difference vs companies that were not required to disclose anything (the 7% figure is vs pre-regulation).

So wages rose for women post-regulation, regardless of whether the company they worked at disclosed wages or not. Meaning other provisions in the law also likely played a role in the decrease of the gender gap.

The study also references another study that finds:

> that firms with higher pay inequality exhibit larger equity returns suggesting that differences in pay inequality across firms are a reflection of differences in managerial talent.

All just food for thought. Regulation and transparency can produce interesting outcomes and side-effects without making us any wiser as to the dynamics driving the differences in outcomes.

Re: Gender pay gap shrinks when companies disclose wages

#28

Post by doesnt_know »

gherig4 wrote: post #8
xfitm3 wrote: post #2

I found this to be really interesting: "The researchers were especially surprised by the way in which the companies adapted to the regulation – by slowing the growth of men’s wages, not increasing women’s."

I experienced this first hand and as a result I departed for greener pastures. Isn't diversity a great thing when it suppresses wages, no wonder all the big boys are pushing for it.

The other way to look at it was that men were artificially overvalued and the market is now correcting itself.

Re: Gender pay gap shrinks when companies disclose wages

#30

Post by ganzuul »

zdragnar wrote: post #18
xfitm3 wrote: post #2

I found this to be really interesting: "The researchers were especially surprised by the way in which the companies adapted to the regulation – by slowing the growth of men’s wages, not increasing women’s."

It seems like a given outcome, to me. Suppose that half of your workforce makes 60% of the wages, and the other half make 40%. Suddenly, PR dictates that you need to even that out. Your budget for salaries hasn't increased. Your other costs haven't decreased. Your projected revenues haven't increased. The money to bump the bottom half up has to come from somewhere, and with a fixed salary budget, it comes from the ot…

Seems like a self-fulfilling prophecy in that scenario. Equal wages is supposed to result in improved production... isn't it?
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