Abstract

In this project we study the effect of the recently introduced law on earnings transparency in Germany on earnings inequality between men and women in Germany. In a first step, we will determine whether there is sufficient unexplained variation in pay across workers so that salary disclosures can actually affect wages. This will be followed by comprehensive descriptive analyses studying the development of the gender pay gap. In order to quantify the causal impact of the newly introduced transparency in wages, we will apply different regression specifications, including event study analyses as well as difference-in-differences approaches. A limitation of the difference-in-differences approach is that the German law on earnings inequality is not binding for every employer and workers‘ right on disclosure or reporting obligations for the employer vary by firm/establishment size. We will try to overcome this issue by re-defining the treatment at the individual-level and by forming new peer groups. In a final step of the analyses, we will investigate the extent employers' hiring behavior is influenced by the earnings transparency. All analyses will be built on administrative worker records from IAB or information collected by a survey specifically designed and conducted for this project..