Effects of Pay Transparency Laws in the Labor Market

• In Event: Equity and employment: hiring, retention, wages, and workplace conditions

Abstract

Pay transparency laws which require job postings to include pay ranges have become increasingly popular in the US, with over 25% of states having passed such laws. Using LinkedIn data of job postings, we leverage quasi-experimental variation in the implementation of these laws on several employment outcomes using new local projection difference-in-difference methods. In both state and firm level analyses, we find that these laws lead to decreases in job postings by firms, and increases in applications per job post. We find these to be particularly strong in firms with job postings across multiple states and which are more exposed. We explore the extent to which these findings are driven by different mechanisms such as moving postings across state borders to jursidictions without pay transparency laws and movement of job postings off platform to informal processes, evidenced by changes in recruiter communication on platform. We also discuss how different populations are impacted by these policies in our data.

Author

• Matthew Baird, LinkedIn
  Presenting Author