Mandatory Pay Range Disclosures – Early Evidence

The aim of the Essex Accounting Centre (EAC) research seminar series is to support our world-class research activities in five key areas: accounting and global development; capital Markets, audit, regulation & reporting; publicness and resilience, precarity, exclusion & social justice; and environment, climate change & vulnerability. The seminar series is also expected to promote inter-disciplinary research that links the work of members of the centre with others both within the university and with external institutions.

 Pay transparency regulations have emerged as a key policy tool to address labor market frictions and promote equitable pay practices.

We investigate the impact of salary range disclosure mandates implemented in Colorado, Washington, and California. Analyzing a comprehensive dataset of 110 million job postings, we find significant increases in pay transparency following the mandates. The mandates are also associated with heightened job requirements and shorter time-to-fill durations, suggesting improved job matching efficiency. Additionally, we observe modest increases in posted salaries and wider salary ranges, reflecting intensified wage competition and greater uncertainty in pay setting, particularly among firms that disclosed salary ranges voluntarily prior to the mandates.

Using Glassdoor company reviews, we also find a decline in employee job satisfaction, potentially driven by increased awareness of pay disparities. Our findings offer preliminary and nuanced insights into the multifaceted impacts of salary range disclosure laws, highlighting both their potential benefits and consequences for employers, job applicants, and current employees.