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[Brown Bag] The Implications of Pay Range Transparency by Prof. Tae Youn PARK, SKK Business School, Sungkyunkwan University
Date
14 Jan 2025
Time
2:30pm - 4:00pm
Start
2025-01-14 14:30:00
End
2025-01-14 16:00:00
Venue
6-207, Level 6, Lau Ming Wai Academic Building (LAU)
Event Type
MGT - Research Seminar
Details
Abstract: Pay transparency initiatives aim to reduce gender pay disparities in the labor market by increasing access to salary information. However, pay range transparency laws, which mandate the disclosure of salary ranges rather than exact figures, may unintentionally lead to gender differences in job-seeking and negotiation behaviors. Across four studies, we find that women prefer job postings with narrower pay ranges more than men do—a preference influenced by higher risk aversion—and that this preference leads to less assertive negotiation behaviors. Using a large archival dataset of U.S. job postings, Study 1 finds considerable variation in pay range sizes across organizations, and shows that those with wider pay ranges tend to have lower representation of female employees. In a survey of New York State residents, Study 2 reveals that women prefer narrower pay ranges more than men do, and that this difference is explained by risk preferences. Study 3 extends these findings among upper-level undergraduates entering the job market, showing that preference for narrower pay ranges is associated with less assertive negotiation behaviors. Study 4 employs a field experiment with actual job seekers, confirming that women are more likely to apply to jobs with narrower pay ranges in real-world settings. Collectively, these findings highlight a potential pathway through which pay range disclosures may inadvertently contribute to gender disparities in job application and compensation outcomes, underscoring important implications for policymakers and organizations aiming to promote pay equity through transparency initiatives.