Wage transparency reduces academic gender wage gap

Wage transparency reduces academic gender wage gap
Fig. 1: Equity in organizations: distribution of market wage residuals by gender and transparency shocks. Credit: DOI: 10.1038/s41562-022-01288-9

A pair of researchers, one with HEC Paris, Jouy-en-Josas, the other with the University of Utah, has found that when universities make the salaries of employees public, the gap in gender pay disparity shrinks. In their paper published in the journal Nature Human Behavior, Tomasz Obloj and Todd Zenger describe how they studied datasets containing gender and other demographic information, along with salary data, for thousands of academics over twenty years and what they found when focusing on gender pay disparity.

Prior research has shown that despite performing equal duties, men in academia are paid more on average than women. The problem has been allowed to persist, Obloj and Zenger suggest, because pay for academics, as with most other professions, is not made public. Female academics cannot complain about lower wages if they do not know how much their male colleagues are making. Because of this, some universities have begun making salary information public—a policy known as salary transparency. In this new effort, the researchers studied whether this has resulted in reducing gender pay gaps.

The work involved obtaining datasets (using the Freedom of Information Act) on approximately 100,00 academics working at in the United States from 1997 to 2017. The data came from both universities that have made salary information public and those that have not, allowing for comparisons to be made.

The data showed that making salary information easily available to people working at a given university tended to result in a significant reduction in the gender pay gap—in many cases by as much as 50%. They also found that making salary information public led to a direct reduction in pay inequality across departments. Unfortunately, they also found that making salary information public also tended to reduce the link between pay and measures of performance.

When universities instituted a transparency policy, wage alterations began almost immediately, most particularly involving those who appeared to be grossly underpaid. They conclude by suggesting that instituting transparency will have a very big impact on academic pay structures.

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More information: Tomasz Obloj et al, The influence of pay transparency on (gender) inequity, inequality and the performance basis of pay, Nature Human Behaviour (2022). DOI: 10.1038/s41562-022-01288-9
Journal information: Nature Human Behaviour

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