Skip to main content
Knowledge4Policy
KNOWLEDGE FOR POLICY

Supporting policy with scientific evidence

We mobilise people and resources to create, curate, make sense of and use knowledge to inform policymaking across Europe.

Projects and activities | Last updated: 15 Dec 2022

Behavioural study on binding pay-transparency measures

Context

The EU gender pay gap (GPG) in 2020 was still 13%, with substantial heterogeneity between EU countries, with the GPG ranging from 0.7% in Luxembourg to 22.3% Latvia.

One of the many reasons for the gender pay gap could be that women lack information on salary levels in the organisation they (plan to) work for. Better and more widespread transparency on gender pay levels could reduce the gap by allowing women to better negotiate their salary.

On the other hand, pay transparency measures could negatively affect firms: providing such information has a cost, but could also lead to disputes and resent among employees, which eventually could harm productivity and lead to higher turnover in staff.

Goals

The purpose of this study was to assess the effect of gender pay transparency on employer and employee behaviour, and identify the best ways to implement this policy. The study investigated both the positive and negative consequences of pay transparency measures for employers and employees, from a behavioural stance.

Methods

The study employed a methodological approach that involved a combination of rigorous literature review and online experiments featuring real incentives, to ensure robustness and validity in the data obtained for analysis.

Expected outcomes

The findings from this study contributed to the objectives laid out in the Directive on equal employment opportunities/treatment for men and women. The results of the study were published in the journal “Economic Policy”.